Nitropack server fails

Environment

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- Operating System: `Darwin`
- Node Version:     `v17.8.0`
- Nuxt Version:     `3.0.0-27489107.7379184`
- Package Manager:  `npm@8.5.5`
- Builder:          `vite`
- User Config:      `publicRuntimeConfig`, `srcDir`, `typescript`, `modules`, `meta`, `css`
- Runtime Modules:  `~/modules/app-customisations.ts`, `@nuxtjs/tailwindcss@5.0.2`
- Build Modules:    `-`
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Reproduction

1. clone - https://github.com/nandi95/nuxt-starter
2. run npm ci && nuxi upgrade (upgrade should give you this compare)

Describe the bug

Nitropack server fails: with ssr on it displays the error: with ssr off, it displays this error:

Additional context

I think this is caused by https://github.com/nuxt/framework/commit/11626eea4f8801e9accc632225c6c54ed4bb69a1#diff-697dbfc0fc13b7a07a647ed5d0ba99e9b5d5e83d6eb78e53b05d97b3a6dec94aR98

Logs

No response

[danielroe]

This seems to be working now. Let me know if not and I can reopen.

[nandi95]

I suspect @karnama/vueish will also have similar issues. Will look into it and into defu. Looking forward to that merge.