I've reduced the test case to this: https://stackblitz.com/edit/vitest-dev-vitest-oip9io?initialPath=__vitest__/

You can see that this Vite plugin fails entirely to resolve paths using TSConfig settings.

It's important to note that:

1. The app itself and TypeScript compiler work fine with this setup. Paths are always relative to their tsconfig.json file, but vite-tsconfig-paths does not account for that, and incorrectly merges path options.
2. In my actual use case, I do not have control over extending from a sub-folder nor the paths. They are auto-generated by Nuxt.