How to correctly spy on setInterval using Jest in unit tests?

Question

I am writing a react application, and also its unit test cases. I am facing a very odd scenario, wherein I am trying to spy on the setInterval ( or setTimeout ) which is placed inside a function, but it is not being called in my test

Following is my code :

// useInterval.js - Oversimplified version

export const useInterval = () => {
    setInterval(() => {
        console.log("called");
    }, 1000);
};

// useInterval.test.js

describe("Test Interval", () => {
    let spyOnSetInterval = null;
    
    beforeEach(() => {
        jest.useFakeTimers();
        spyOnSetInterval = jest.spyOn(global, 'setInterval'); 
    });

    afterEach(() => {
        jest.restoreAllMocks();
        jest.useRealTimers();
    });

    it("checking to see if setInterval is called", () => {
        useInterval(); // already imported in the current file.
        jest.advanceTimersByTime(1000);
        expect(spyOnSetInterval).toBeCalled();
    });
});

Output

expect(jest.fn()).toBeCalled()

    Expected number of calls: >= 1
    Received number of calls:    0

      18 |         useInterval();
      19 |         jest.advanceTimersByTime(1000);
    > 20 |         expect(spyOnSetInterval).toBeCalled();
         |                                  ^
      21 |     });
      22 | })

What am I doing wrong here ? If I spy on the console.log also which is inside the setInterval, it is never called. However, if I place console.log outside setInterval and spy on console.log, then it is working fine.

At the end, I need to write test cases to check that setInterval is being called.

Tried :

•     jest.advanceTimersByTime(5000);  // To make sure setInterval is being called multiple times
  

• jest.runAllTimers() // Even though this should not work since interval is infinite.
• Tried using Jest v26 and v29
• Tried using jest.useFakeTimers('legacy'); with jest v29
• Tried using simon API but that also didnt work

Update If I use jest.useFakeTimers(), it doesnt work. However, if I alternatively use "timers":"fake" in jest global config file, this starts working. why is jest.useFakeTimers() not working for me ? I tried placing it in beforeEach / beforeAll / start of describe statement / top of file.