Module build failed (from ../../node_modules/@nrwl/web/src/utils/web-babel-loader.js)

Current Behavior

Babel is not compiling TS. I get the following error when trying to run npx nx serve app:

ERROR in ../event-emitter/src/lib/event-emitter.ts
Module build failed (from ../../node_modules/@nrwl/web/src/utils/web-babel-loader.js):
SyntaxError: /Users/andy/dev/nx-test/packages/event-emitter/src/lib/event-emitter.ts: Unexpected token, expected "(" (6:34)

  4 |  * Create an event emitter.
  5 |  */
> 6 | export function createEventEmitter<
    |                                   ^
  7 |   T extends Record<string, unknown>
  8 | >(): EventEmitter<T> {

Expected Behavior

TS syntax should be recognised correctly.

Steps to Reproduce

Here is a minimal repository: https://github.com/andyjessop/nx-test

[andyjessop]

I just added a .babelrc into each of my package root directories with these contents:

{
  "presets": ["@nrwl/web/babel"]
}

[github-actions[bot]]

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