Link to the code that reproduces this issue

https://github.com/michaelschufi/repro-nextjs-monorepo-dev-overlay-path

To Reproduce

1. Go to apps/web.
2. Run the dev server pnpm run dev
3. Open the app inside the browser e.g. on http://localhost:3000/
4. Observe the error path not being relative to the web app's root.

Current vs. Expected behavior

The path shown in the dev-overlay is relative to the root-level node_modules directory instead of the current working directory where next dev is run.

This results in the editor link (on the right) not working properly.

Provide environment information

Operating System:
  Platform: linux
  Arch: x64
  Version: #1 SMP Fri Mar 29 23:14:13 UTC 2024
  Available memory (MB): 15853
  Available CPU cores: 16
Binaries:
  Node: 22.11.0
  npm: 10.9.0
  Yarn: N/A
  pnpm: 9.0.0
Relevant Packages:
  next: 15.4.0-canary.12 // Latest available version is detected (15.4.0-canary.12).
  eslint-config-next: N/A
  react: 19.1.0
  react-dom: 19.1.0
  typescript: 5.8.2
Next.js Config:
  output: N/A

Which area(s) are affected? (Select all that apply)

Error Overlay, Turbopack

Which stage(s) are affected? (Select all that apply)

next dev (local)

Additional context

It doesn't matter if the root directory is open in VS Code, or if the project directory is open. Since the path is wrong, VS Code cannot not resolve it either way.

This might be related to #73258 where the path was duplicated.

This might be working with webpack. Although, I cannot be sure, as the error is different if I omit --turbopack. Probably because the Next.js example I used doesn't support webpack.

Edit:
Path is fine if the issue is not at the import level
When commenting the import out.

// import { foo } from "./not-existing";

but keeping the foo reference on the onClick of the button, there's a reference error. This error's path is shown correctly, and even the button is working: