We have the following error when trying to run vsce package: The following files have the same case insensitive path, which isn't supported by the VSIX format.

How can we understand what is the problem here? Where is that error coming from? What is wrong with the package?

This package is under dependencies. When we package the extension without the aforementioned package, all the devDependecies go into the .vsix file (??). When we put the aforementioned package inside devDependencies it's packaged in vsix but its dependent packages are not installed.

One more thing to mention is that vsce doesn't work correctly with monorepos. You have to ignore all other packages and monorepo files so vsce package does not include them in .vsix.

Here is the output:

Here is the package structure: