next.js: layout.tsx - Returns server errors if not located in root "app" folder (Crucial)

Verify canary release

• I verified that the issue exists in the latest Next.js canary release

Provide environment information

Operating System:
      Platform: darwin
      Arch: x64
      Version: Darwin Kernel Version 22.5.0: Thu Jun  8 22:22:22 PDT 2023; root:xnu-8796.121.3~7/RELEASE_X86_64
    Binaries:
      Node: 18.16.1
      npm: 9.5.1
      Yarn: 1.22.19
      pnpm: N/A
    Relevant Packages:
      next: 13.4.10
      eslint-config-next: 13.4.10
      react: 18.2.0
      react-dom: 18.2.0
      typescript: 5.1.6
    Next.js Config:
      output: N/A

Which area(s) of Next.js are affected? (leave empty if unsure)

App Router

Link to the code that reproduces this issue or a replay of the bug

https://galanthus-shiny-xylophone-97xj9r4vp639p49.github.dev/

To Reproduce

Move layout.tsx/jsx inside (website) to re-produce the error. Demo is provided with an URL. check: https://galanthus-shiny-xylophone-97xj9r4vp639p49-3000.preview.app.github.dev/dasd (for error) Move the layout outside to the “app” folder error is gone. Imported global styles not loading after moving the layout file to the “app” folder.

Go to random page /abc to see the server errors:

^[Warning: React.createElement: type is invalid -- expected a string (for built-in components) or a class/function (for composite components) but got: undefined. You likely forgot to export your component from the file it's defined in, or you might have mixed up default and named imports.
Warning: React.createElement: type is invalid -- expected a string (for built-in components) or a class/function (for composite components) but got: null.
Error: Unsupported Server Component type: Null
    at attemptResolveElement (webpack-internal:///(sc_server)/./node_modules/next/dist/compiled/react-server-dom-webpack/cjs/react-server-dom-webpack-server.edge.development.js:1421:19)
    at resolveModelToJSON (webpack-internal:///(sc_server)/./node_modules/next/dist/compiled/react-server-dom-webpack/cjs/react-server-dom-webpack-server.edge.development.js:1627:41)
    at Object.toJSON (webpack-internal:///(sc_server)/./node_modules/next/dist/compiled/react-server-dom-webpack/cjs/react-server-dom-webpack-server.edge.development.js:1169:28)
    at stringify (<anonymous>)
    at processModelChunk (webpack-internal:///(sc_server)/./node_modules/next/dist/compiled/react-server-dom-webpack/cjs/react-server-dom-webpack-server.edge.development.js:2116:24)
    at retryTask (webpack-internal:///(sc_server)/./node_modules/next/dist/compiled/react-server-dom-webpack/cjs/react-server-dom-webpack-server.edge.development.js:1882:38)
    at performWork (webpack-internal:///(sc_server)/./node_modules/next/dist/compiled/react-server-dom-webpack/cjs/react-server-dom-webpack-server.edge.development.js:1920:21)
    at Timeout.eval [as _onTimeout] (webpack-internal:///(sc_server)/./node_modules/next/dist/compiled/react-server-dom-webpack/cjs/react-server-dom-webpack-server.edge.development.js:1429:28)
    at listOnTimeout (node:internal/timers:569:17)
    at process.processTimers (node:internal/timers:512:7) {
  digest: '135229182'
}

Describe the Bug

layout file has to be located in the root of “app” moving it inside a another path like (website), (front-end) will not work.

Expected Behavior

To work inside root, as in different route paths like it used to work in the previous version.

Which browser are you using? (if relevant)

Brave

How are you deploying your application? (if relevant)

Vercel