VSCode typescript autosuggestion broken after migration to pnpm

Question

Setup

We have a monorepo and recently we decided to migrate from yarn to pnpm.

Node version: 14.20.0
pnpm version: 7.9.5
Typescript version: 4.4.2

After migrating to pnpm I updated the package manager settings in VSCode as below:

Problem

(The problem described below occurs in more that 1 apps, but for the sake of simplicity I will focus on one)

In one of the monorepo's apps we use React with TypeScript.

The problem is that VSCode does not seem to read the nested dependencies' types.

Example

One of the app's dependencies (specified in its package.json) is react-router-dom and react-router-dom has react-router as a dependency.

react-router-dom exports the useLocation hook from react-router.

When I use the useLocation hook, VSCode displays its type as

ESLint does not display any error, so it seems that it is able to follow pnpm's symlinks and read useNavigate hook's type.

Why isn't VSCode able to properly read the nested dependency's types?

Edits

VSCode typescript version used

Answer 1

Turns out I had some settings in the monorepo's app's tsconfig wrong.

To work properly, I had to update it:

From

To