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peer dependency confilct when creating projects using vue 2 on npm 7

See original GitHub issue

Version

4.5.11

Environment info

 System:
    OS: Linux 5.4 Ubuntu 18.04.4 LTS (Bionic Beaver)
    CPU: (12) x64 Intel(R) Core(TM) i7-9750H CPU @ 2.60GHz
  Binaries:
    Node: 12.17.0 - /usr/local/bin/node
    Yarn: 1.22.5 - /usr/bin/yarn
    npm: 7.5.2 - ~/npm-global/bin/npm
  Browsers:
    Chrome: Not Found
    Firefox: Not Found
  npmPackages:
    @vue/babel-helper-vue-jsx-merge-props:  1.2.1
    @vue/babel-helper-vue-transform-on:  1.0.2
    @vue/babel-plugin-jsx:  1.0.3
    @vue/babel-plugin-transform-vue-jsx:  1.2.1
    @vue/babel-preset-app:  4.5.11
    @vue/babel-preset-jsx:  1.2.4
    @vue/babel-sugar-composition-api-inject-h:  1.2.1
    @vue/babel-sugar-composition-api-render-instance:  1.2.4
    @vue/babel-sugar-functional-vue:  1.2.2
    @vue/babel-sugar-inject-h:  1.2.2
    @vue/babel-sugar-v-model:  1.2.3
    @vue/babel-sugar-v-on:  1.2.3
    @vue/cli-overlay:  4.5.11
    @vue/cli-plugin-babel: ~4.5.0 => 4.5.11
    @vue/cli-plugin-eslint: ~4.5.0 => 4.5.11
    @vue/cli-plugin-router:  4.5.11
    @vue/cli-plugin-vuex:  4.5.11
    @vue/cli-service: ~4.5.0 => 4.5.11
    @vue/cli-shared-utils:  4.5.11
    @vue/component-compiler-utils:  3.2.0
    @vue/preload-webpack-plugin:  1.1.2
    @vue/web-component-wrapper:  1.2.0
    eslint-plugin-vue: ^6.2.2 => 6.2.2
    vue: ^2.6.11 => 2.6.12
    vue-eslint-parser:  7.4.1
    vue-hot-reload-api:  2.3.4
    vue-loader:  15.9.6 (16.1.2)
    vue-style-loader:  4.1.2
    vue-template-compiler: ^2.6.11 => 2.6.12
    vue-template-es2015-compiler:  1.9.1
  npmGlobalPackages:
    @vue/cli: 4.5.11

Steps to reproduce

Run

vue create project_name

to create a vue project and then choose vue 2. Then

cd project_name && npm update

What is expected?

Dependencies updated

What is actually happening?

receive an error says “ERESOLVE unable to resolve dependency tree”

Detail:

$ npm update         
npm ERR! code ERESOLVE
npm ERR! ERESOLVE unable to resolve dependency tree
npm ERR! 
npm ERR! While resolving: project_name@0.1.0
npm ERR! Found: vue@2.6.12
npm ERR! node_modules/vue
npm ERR!   vue@"^2.6.11" from the root project
npm ERR! 
npm ERR! Could not resolve dependency:
npm ERR! peer vue@"3.0.5" from @vue/compiler-sfc@3.0.5
npm ERR! node_modules/@vue/compiler-sfc
npm ERR!   peerOptional @vue/compiler-sfc@"^3.0.0-beta.14" from @vue/cli-service@4.5.11
npm ERR!   node_modules/@vue/cli-service
npm ERR!     dev @vue/cli-service@"~4.5.0" from the root project
npm ERR!     1 more (@vue/cli-plugin-babel)
npm ERR! 
npm ERR! Fix the upstream dependency conflict, or retry
npm ERR! this command with --force, or --legacy-peer-deps
npm ERR! to accept an incorrect (and potentially broken) dependency resolution.

peerDependenciesMeta used in @vue/cli-service causes unexpected behavior on npm 7