From the docs on the loose mode of yarn v2:
Yarn ships with a "loose" mode which will cause the PnP linker to work in tandem with the node-modules hoister - we will first generate the list of packages that would have been hoisted to the top-level in a typical node_modules install, then remember this list as what we call the "fallback pool".
At runtime, packages that require unlisted dependencies will still be allowed to access them if any version of the dependency ended up in the fallback pool (which packages exactly are allowed to rely on the fallback pool can be tweaked with pnpFallbackMode).
So where exactly is this "fallback pool" located? In .yarn/cache
? I activated the loose mode in a project with many deps but couldn't spot any difference compared to the the previous state.