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What does this PR do?

This PR fixes checkpoint saving for FSDPv2 (SPMD) on TPU by properly unwrapping nested FSDP wrappers before extracting the model state dict.

When using FSDPv2 on TPU, models have nested FSDP wrappers around each transformer layer. The previous implementation only unwrapped the top-level wrapper, causing the saved checkpoint to contain wrapped state dict keys instead of the actual model parameters. This resulted in:

  • PEFT adapters not being saved in the correct format
  • Model weights appearing unchanged after training
  • Missing adapter keys when loading checkpoints

The fix uses unwrap_model with recursive=True specifically for FSDPv2 to unwrap all nested wrappers, then extracts the state dict from the fully unwrapped model. This ensures clean parameter keys in saved checkpoints while maintaining backward compatibility with FSDPv1 and other training configurations.
#36004
Fixes #36004

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  • This PR fixes a typo or improves the docs (you can dismiss the other checks if that's the case).
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  • Did you write any new necessary tests?

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@SunMarc @muellerzr

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FSDP Torch XLA vs. FSDPv2 (SMPD) Torch XLA checkpoint saving bug

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