the presence of the node_modules directory in the parent directory disables HMR for the my-app project.

[yuhonyon]

Thank you for the clarification. It seems like you're encountering an issue with Webpack 5's new mechanism that disables hot module replacement (HMR) when there is a node_modules directory in the project path. While you understand that this is likely for performance optimization, you believe that the optimization should target node_modules within the project rather than simply disabling HMR whenever there is a node_modules directory in the path.

Your npm package is installed globally, and the installation path is /User/xxxx/xxxx/node_modules/my-app, which contains two node_modules directories: /xxxx/node_modules/xxx/my-app/node_modules. When you make updates to files within my-app, the presence of the node_modules directory in the parent directory disables HMR for the my-app project.

You're suggesting that instead of disabling HMR based solely on the presence of any node_modules directory in the path, Webpack should perhaps focus on optimizing node_modules within the project scope.

This issue might need to be reported to the Webpack team as a feature request or a bug report, suggesting a more refined approach to HMR optimization. You could provide this context along with your explanation to ensure clarity in your bug report or feature request.