create-react-app: npm update fails in CRA app after node-sass

Describe the bug

After the install of node-sass in a newly create CRA app, npm update fails with below error.

npm ERR! ERESOLVE unable to resolve dependency tree
npm ERR!
npm ERR! Found: @babel/core@7.12.3
npm ERR! node_modules/@babel/core
npm ERR!   @babel/core@"7.12.3" from react-scripts@4.0.3
npm ERR!   node_modules/react-scripts
npm ERR!     react-scripts@"^4.0.3" from the root project
npm ERR!   @babel/core@"^7.12.3" from @svgr/webpack@5.5.0
npm ERR!   node_modules/@svgr/webpack
npm ERR!     @svgr/webpack@"5.5.0" from react-scripts@4.0.3
npm ERR!     node_modules/react-scripts
npm ERR!       react-scripts@"^4.0.3" from the root project
npm ERR!   9 more (babel-jest, babel-loader, ...)
npm ERR!
npm ERR! Could not resolve dependency:
npm ERR! peer @babel/core@"^7.13.0" from @babel/plugin-bugfix-v8-spread-parameters-in-optional-chaining@7.13.12
npm ERR! node_modules/@babel/preset-env/node_modules/@babel/plugin-bugfix-v8-spread-parameters-in-optional-chaining
npm ERR!   @babel/plugin-bugfix-v8-spread-parameters-in-optional-chaining@"^7.13.12" from @babel/preset-env@7.13.12
npm ERR!   node_modules/@babel/preset-env
npm ERR!     @babel/preset-env@"^7.12.1" from @svgr/webpack@5.5.0
npm ERR!     node_modules/@svgr/webpack
npm ERR!       @svgr/webpack@"5.5.0" from react-scripts@4.0.3
npm ERR!       node_modules/react-scripts
npm ERR!
npm ERR! Fix the upstream dependency conflict, or retry
npm ERR! this command with --force, or --legacy-peer-deps
npm ERR! to accept an incorrect (and potentially broken) dependency resolution.
npm ERR!
npm ERR! See C:\Users\peter\AppData\Local\npm-cache\eresolve-report.txt for a full report.

npm ERR! A complete log of this run can be found in:
npm ERR!     C:\Users\peter\AppData\Local\npm-cache\_logs\2021-03-25T20_42_43_029Z-debug.log

Did you try recovering your dependencies?

Yes, cleared npm cache and setup new project.

Environment

- create-react-app version: 4.0.3
- NPM version: 7.7.4
- Node version: v14.16.0
- Node Process: {
  node: '14.16.0',
  v8: '8.4.371.19-node.18',
  uv: '1.40.0',
  zlib: '1.2.11',
  brotli: '1.0.9',
  ares: '1.16.1',
  modules: '83',
  nghttp2: '1.41.0',
  napi: '7',
  llhttp: '2.1.3',
  openssl: '1.1.1j',
  cldr: '37.0',
  icu: '67.1',
  tz: '2020a',
  unicode: '13.0'
}
- Node Platform: win32
- Node architecture: x64
- node-sass version: 
    node-sass       5.0.0   (Wrapper)       [JavaScript]
    libsass         3.5.5   (Sass Compiler) [C/C++]

- npm node-sass versions:
├── node-sass@5.0.0
└─┬ react-scripts@4.0.3
  └─┬ sass-loader@10.1.1
    └── node-sass@5.0.0 deduped