next.js: Turbopack does not compile CSS nesting for styled-jsx

Link to the code that reproduces this issue

https://github.com/vpontis/nextjs-14-turbo-styled-jsx

To Reproduce

• Git Repository
• Demo

The Turbopack docs it says that it supports PostCSS nested which allows you to nest CSS selectors.

This would be very useful for us since we are currently using Sass just to be able to nest selectors. We would like to move off Sass / Babel and use Turbo.

But I think Turbopack doesn’t apply the PostCSS plugins to the CSS generated by Styled JSX.

For example, the following code:

export default function Home() {
  return (
    <>
      <div className={'container'}>
        container (should be blue)

        <div className="inner">
          container + inner (should be yellow)
        </div>
      </div>

      <style jsx>{`
        .container {
          color: blue;
          padding: 3rem;

          .inn {
            &er {
              color: yellow;
            }
          }
        }
      `}</style>
    </>
  )
}

Gives me this CSS:

.container {
    color: blue;
    padding: 3rem;

    .inn {
        &er {
            color: yellow
        }
    }
}

Where I would expect:

.container {
    color: blue;
    padding: 3rem;
}

.container .inner {
    color: yellow;
}

Current vs. Expected behavior

CSS nesting should be compiled but it’s not.

Verify canary release

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

Provide environment information

Operating System:
  Platform: darwin
  Arch: arm64
  Version: Darwin Kernel Version 23.1.0: Mon Oct  9 21:27:24 PDT 2023; root:xnu-10002.41.9~6/RELEASE_ARM64_T6000
Binaries:
  Node: 18.16.1
  npm: 9.5.1
  Yarn: 1.22.19
  pnpm: 8.10.0
Relevant Packages:
  next: 14.0.0
  eslint-config-next: 14.0.0
  react: 18.2.0
  react-dom: 18.2.0
  typescript: 5.2.2
Next.js Config:
  output: N/A

Which area(s) are affected? (Select all that apply)

SWC transpilation, Turbopack (–turbo)

Additional context

This would be super super helpful to us to get working 😃. Happy to look into this if you’d like to point me in the right direction 😃

_PACK-2106