[SPLoaderError.loadComponentError]: Failed to load component ([APP]). Original error: Manifest not found for component id [ID] and version "17.0.2"

Question

I am getting an error when testing the Web Part on workbench.aspx using gulp serve command

Something went wrong If the problem persists, contact the site administrator and give them the information in Technical Details. TECHNICAL DETAILS [SPLoaderError.loadComponentError]: Failed to load component "f02eed6e-bebc-426e-9938-xxxxxxx" ([APP-NAME]). Original error: Manifest not found for component id "aa0a46ec-1505-43cd-a44a-93f3a5aa460a" and version "17.0.2".

INNERERROR: Manifest not found for component id "aa0a46ec-1505-43cd-a44a-93f3a5aa460a" and version "17.0.2". CALLSTACK: Error at t [as constructor] (https://res-1.cdn.office.net/files/sp-client/sp-webpart-workbench-assembly_en-us_0d974feb82adaa817c93d235f081873b.js:3:208866) at new t (https://res-1.cdn.office.net/files/sp-client/sp-webpart-workbench-assembly_en-us_0d974feb82adaa817c93d235f081873b.js:70:674444) at e.buildErrorWithVerboseLog (https://res-1.cdn.office.net/files/sp-client/sp-webpart-workbench-assembly_en-us_0d974feb82adaa817c93d235f081873b.js:70:711728) at e.buildLoadComponentError (https://res-1.cdn.office.net/files/sp-client/sp-webpart-workbench-assembly_en-us_0d974feb82adaa817c93d235f081873b.js:70:707819) at https://res-1.cdn.office.net/files/sp-client/chunk.systemjs-component-loader_en-us_54faa0ae3793669d4a62.js:1:6036

Noticed that component aa0a46ec-1505-43cd-a44a-93f3a5aa460a belongs to react, currenctly the manifest shows two versions 17.0.1 and 17.0.2 as they are dependencies for other components

package.json as follows:

{
    "name": "xxxxxxxxxxxxxt",
    "version": "0.0.1",
    "private": true,
    "engines": {
        "node": ">=16.13.0 <17.0.0"
    },
    "main": "lib/index.js",
    "scripts": {
        "build": "gulp bundle",
        "clean": "gulp clean",
        "test": "gulp test"
    },
    "dependencies": {
        "@coveo/headless": "2.10.0",
        "@emotion/react": "^11.10.5",
        "@emotion/styled": "^11.10.5",
        "@fontsource/roboto": "^4.5.8",
        "@microsoft/sp-core-library": "^1.16.1",
        "@microsoft/sp-lodash-subset": "1.16.1",
        "@microsoft/sp-office-ui-fabric-core": "1.16.1",
        "@microsoft/sp-property-pane": "1.16.1",
        "@microsoft/sp-webpart-base": "1.16.1",
        "@mui/icons-material": "^5.10.9",
        "@mui/material": "^5.10.12",
        "office-ui-fabric-react": "^7.199.1",
        "react": "^17.0.1",
        "react-dom": "^17.0.1",
        "tslib": "2.3.1"
    },
    "devDependencies": {
        "@microsoft/eslint-config-spfx": "1.16.1",
        "@microsoft/eslint-plugin-spfx": "1.16.1",
        "@microsoft/rush-stack-compiler-4.5": "0.2.2",
        "@microsoft/sp-build-web": "1.16.1",
        "@microsoft/sp-module-interfaces": "1.16.1",
        "@rushstack/eslint-config": "2.5.1",
        "@types/react": "^17.0.1",
        "@types/react-dom": "^17.0.1",
        "@types/webpack-env": "~1.15.2",
        "ajv": "^6.12.5",
        "eslint-plugin-react-hooks": "4.3.0",
        "gulp": "4.0.2",
        "typescript": "^4.8.4"
    }
}

Any idea how to solve this?

Tried updating react to 17.0.2 and delete node_modules and doing npm install again. Deleted package-lock.json without any success