After migrating to yarn 3 workspace "Cannot use import statement outside a module" running react-scripts test

Question

I have a repository with yarn 3 workspaces and a CRA front end located in /packages/client

yarn workspace client start successfully launches the development app on port 3000.

The test suite ran correctly before moving the client to the packages folder and setting up the yarn workspace. I have made no changes to the client's package.json.

Running yarn workspace client test gives:

Error: Failed to initialize watch plugin "../../.yarn/__virtual__/jest-watch-typeahead-virtual-2d80f0ed7c/0/cache/jest-watch-typeahead-npm-1.0.0-0c228b0e38-388d518974.zip/node_modules/jest-watch-typeahead/build/file_name_plugin/plugin.js":

  ● Test suite failed to run

    /Users/bob/monorepo/.yarn/__virtual__/jest-watch-typeahead-virtual-2d80f0ed7c/0/cache/jest-watch-typeahead-npm-1.0.0-0c228b0e38-388d518974.zip/node_modules/jest-watch-typeahead/build/file_name_plugin/plugin.js:1

import { Prompt } from 'jest-watcher';
    ^^^^^^

    SyntaxError: Cannot use import statement outside a module

      28077 |     try {
      28078 |       module.isLoading = true;
    > 28079 |       module.load(modulePath);
            |              ^
      28080 |       hasThrown = false;
      28081 |     } finally {
      28082 |       module.isLoading = false;

      at Function.external_module_.Module._load (../../.pnp.cjs:28079:14)