nuxt: Nuxt 3 - fresh install on Windows - cannot find module

Environment

Nuxt CLI v3.0.0-27243104.5e903ae 10:48:58 RootDir: c:\testing\nuxt3-app 10:49:00 Nuxt project info: 10:49:00

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• Operating System: Windows_NT
• Node Version: v16.11.1
• Nuxt Version: 3.0.0-27243104.5e903ae
• Package Manager: Yarn
• Bundler: Vite
• User Config: -
• Runtime Modules: -
• Build Modules: -

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Describe the bug

Nuxt CLI reports it cannot find module, the web page is stuck on “Starting nuxt…” with NuxtJS logo and light/dark mode flashing background.

Reproduction

Followed the New project in docs.

npx nuxi init nuxt3-app
cd nuxt3-app
yarn install
yarn dev -o

(happens both with yarn and npm)

The directory of requested module, “nuxt3-app.nuxt\server”, doesn’t exist. I only see “server” directory inside “nuxt3-app.nuxt\dist\server”, but that one doesn’t have index.mjs

Logs

Nuxt CLI v3.0.0-27243104.5e903ae                                                                          10:52:05
                                                                                                          10:52:05
  > Local:    http://localhost:3000/
  > Network:  http://172.24.96.1:3000/
  > Network:  http://172.18.48.1:3000/
  > Network:  http://192.168.56.1:3000/
  > Network:  http://192.168.86.79:3000/

i Vite warmed up in 685ms                                                                                 10:52:08
√ Generated nuxt.d.ts                                                                                     10:52:08
√ Vite server built in 956ms                                                                              10:52:09
√ Nitro built in 81 ms                                                                                    10:52:09

 WARN  [worker] Cannot find module 'c:\testing\nuxt3-app\.nuxt\server\index.mjs' imported from c:\testing\nuxt3-app\.nuxt\nitro\index.mjs

  at new NodeError (node:internal/errors:371:5)
  at finalizeResolution (node:internal/modules/esm/resolve:416:11)
  at moduleResolve (node:internal/modules/esm/resolve:932:10)
  at Loader.defaultResolve [as _resolve] (node:internal/modules/esm/resolve:1044:11)
  at Loader.resolve (node:internal/modules/esm/loader:89:40)
  at Loader.getModuleJob (node:internal/modules/esm/loader:242:28)
  at ModuleWrap.<anonymous> (node:internal/modules/esm/module_job:76:40)
  at link (node:internal/modules/esm/module_job:75:36)