tshy fails to build a basic project

[aqeelat]

I have a ts project that is very simple.
However, running yarn dlx tshy results in a bunch of

src/user/notification.ts:2:40 - error TS2834: Relative import paths need explicit file extensions in ECMAScript imports when '--moduleResolution' is 'node16' or 'nodenext'. Consider adding an extension to the import path.

2 import { NotificationTypeConfig } from './dto/notifications'
                                         ~~~~~~~~~~~~~~~~~~~~~

src/user/user.ts:1:40 - error TS2307: Cannot find module '../response.dto' or its corresponding type declarations.

1 import { ICommonSuccessResponse } from '../response.dto'
                                         ~~~~~~~~~~~~~~~~~

and then prints

writing tsconfig files...
using existing tsconfig.json
building /Users/aqeelat/sawi/monorepo/schemas
tshy config {
  exports: { './package.json': './package.json', '.': './src/index.ts' }
}
exports {
  './package.json': './package.json',
  '.': {
    import: { types: './dist/esm/index.d.ts', default: './dist/esm/index.js' },
    require: {
      types: './dist/commonjs/index.d.ts',
      default: './dist/commonjs/index.js'
    }
  }
}
set dialect { where: 'src', mode: 'esm' }
building esm
build failed

Our initial setup was based on: https://thesametech.com/how-to-build-typescript-project/ and it works fine.
I also tried tsup and it worked without any problem.

package.json

{
  "name": "schemas",
  "packageManager": "[email protected]",
  "main": "./dist/cjs/index.js",
  "types": "./dist/types/index.js",
  "module": "./dist/esm/index.js",
  "exports": {
    ".": {
      "import": "./dist/esm/index.js",
      "require": "./dist/cjs/index.js",
      "types": "./dist/types/index.js"
    }
  },
  "scripts": {
    "build": "rimraf ./dist; tsc -b ./tsconfig.cjs.json ./tsconfig.esm.json ./tsconfig.types.json && node ./scripts/prepare",
    "format": "prettier --write \"src/**/*.ts\"",
    "lint": "eslint \"{src,apps,libs,test}/**/*.ts\" --fix"
  },
  "devDependencies": {
    "@eslint/js": "^9.15.0",
    "@types/eslint": "^9.6.1",
    "@types/eslint__js": "^8.42.3",
    "eslint": "^9.15.0",
    "eslint-plugin-prettier": "^5.2.1",
    "prettier": "^3.3.3",
    "rimraf": "^6.0.1",
    "typescript": "^5.6.3",
    "typescript-eslint": "^8.15.0"
  },
  "dependencies": {
    "date-fns": "^3.6.0",
    "zod": "^3.23.8"
  },
  "nx": {
    "name": "schemas"
  }
}

tsconfig.json

{
  "exclude": ["node_modules"],
  "include": ["src"],
  "compilerOptions": {
    "target": "ES2022",
    "useDefineForClassFields": true,
    "lib": ["ES5", "ES6", "ES2020", "ES2022"],
    "skipLibCheck": true,
    "allowSyntheticDefaultImports": true,
    "esModuleInterop": true,
    "sourceMap": true,
    "resolveJsonModule": true,
    "moduleResolution": "node",
    "experimentalDecorators": true
  }
}