prisma: Netlify serverless functions with prisma errors with `NestedError: Cannot read from 'PROJECT_PATH/netlify-serverless-functions/node_modules/.prisma': EISDIR: illegal operation on a directory, read`

Bug description

Error Name NestedError: Cannot read from ‘PROJECT_PATH/netlify-serverless-functions/node_modules/.prisma’: EISDIR: illegal operation on a directory, read

netlify.toml

[functions]
        directory = "functions/"

[[redirects]]
        from = "/api/*"
        to = "/.netlify/functions/:splat"
        status = 200

[dev]
        targetPort = 5173

I found this to be a Prisma error when trying another npm package. It works perfectly on netlify functions.

How to reproduce

1. Source code Github Repo
2. Start the server netlify dev
3. Navigate to /api/hello
4. Error NestedError: Cannot read from 'PROJECT_PATH/netlify-serverless-functions/node_modules/.prisma': EISDIR: illegal operation on a directory, read

Expected behavior

Expected /api/hello to return users from the database. But unable to read the prisma module from the netlify functions.

Prisma information

// prisma/schema.prisma
generator client {
  provider      = "prisma-client-js"
}

datasource db {
  provider = "postgresql"
  url      = env("DATABASE_URL")
}

model User {
  id       String @id @default(uuid())
  name     String
  email    String @unique
  password String
}

// functions/hello.ts
import { PrismaClient } from "@prisma/client";
const prisma = new PrismaClient();

export const handler = async (event, context) => {
  const users = await prisma.user.findMany()

  return {
    statusCode: 200,
    body: JSON.stringify(users),
  };
};

Environment & setup

• OS: Windows
• Database: PostgreSQL
• Node.js version: 18.12.0
• netlify-cli: 12.0.11

Prisma Version

prisma                  : 4.5.0
@prisma/client          : 4.5.0
Current platform        : windows
Query Engine (Node-API) : libquery-engine 0362da9eebca54d94c8ef5edd3b2e90af99ba452 (at node_modules\@prisma\engines\query_engine-windows.dll.node)
Migration Engine        : migration-engine-cli 0362da9eebca54d94c8ef5edd3b2e90af99ba452 (at node_modules\@prisma\engines\migration-engine-windows.exe)
Introspection Engine    : introspection-core 0362da9eebca54d94c8ef5edd3b2e90af99ba452 (at node_modules\@prisma\engines\introspection-engine-windows.exe)
Format Binary           : prisma-fmt 0362da9eebca54d94c8ef5edd3b2e90af99ba452 (at node_modules\@prisma\engines\prisma-fmt-windows.exe)
Format Wasm             : @prisma/prisma-fmt-wasm 4.5.0-43.0362da9eebca54d94c8ef5edd3b2e90af99ba452
Default Engines Hash    : 0362da9eebca54d94c8ef5edd3b2e90af99ba452
Studio                  : 0.476.0