Vite error Rollup failed to resolve import "react" from sanity visual editing

[toddpadwick]

Version

module: 1.14.1 and 2.0.0
nuxt: 4.2.2

Nuxt configuration

export default defineNuxtConfig({
  ...,
  modules: [
    "@nuxtjs/sanity",
  ...
  ],
  sanity: {
    projectId: process.env.SANITY_PROJECT_ID,
    apiVersion: process.env.SANITY_API_VERSION,
    useCdn: process.env.SANITY_CDN,
    dataset: process.env.SANITY_DATASET,
    token:process.env.SANITY_TOKEN,
    visualEditing: {
      token: process.env.SANITY_TOKEN,
      studioUrl: process.env.SANITY_STUDIO_URL,
      zIndex: 51,
    },
  },
  
});

Build error:

Nuxt build error: Error: [vite]: Rollup failed to resolve import "react" from "/opt/build/repo/node_modules/@sanity/visual-editing/dist/index.js".
11:07:37 AM: │  This is most likely unintended because it can break your application at runtime.
11:07:37 AM: │  If you do want to externalize this module explicitly add it to
11:07:37 AM: │  `build.rollupOptions.external`

What i've tried:

• reluctantly i tried installing "react", "react-dom" and "react-is" to see if it would at least work until a better fix is available, but it resulted in this error:

Nuxt build error: Error: [vite:load-fallback] Could not load /opt/build/repo/utils/sanity-visual-editing-stub.ts (imported by node_modules/@nuxtjs/sanity/dist/runtime/composables/useSanityVisualEditing.js): ENOENT: no such file or directory, open '/opt/build/repo/utils/sanity-visual-editing-stub.ts'

• tried disabling visual editing altogether. Still seems to return the same react requirement errors. So looks like even without visual editing in use, nuxt/sanity requires it.
• I tried with both 1.14.1 and 2.0.0