Cannot read properties of undefined (reading 'wrapDynamicImport'). Getting this error right after generating a new project and trying to run tests

• I ran the following commands in sveltekit to create a new project

  npx sv create ch_ui
  

• I selected the following options

  ┌  Welcome to the Svelte CLI! (v0.8.20)
  │
  ◇  Which template would you like?
  │  SvelteKit minimal
  │
  ◇  Add type checking with TypeScript?
  │  Yes, using TypeScript syntax
  │
  ◆  Project created
  │
  ◇  What would you like to add to your project? (use arrow keys / space bar)
  │  prettier, eslint, vitest, playwright, sveltekit-adapter, devtools-json
  │
  ◇  vitest: What do you want to use vitest for?
  │  unit testing, component testing
  │
  ◇  sveltekit-adapter: Which SvelteKit adapter would you like to use?
  │  node
  │
  ◆  Successfully setup add-ons
  │
  ◇  Which package manager do you want to install dependencies with?
  │  npm
  │
  ◆  Successfully installed dependencies
  │
  ◇  Successfully formatted modified files
  │
  
  

• I navigated inside the directory and ran the following command

  npm run lint && npm run format && npm run check && npm run test && npm run dev
  

• It immediately throws the following error.

   RUN  v3.2.4 /Users/vr/Desktop/code/ch/ch_ui
  
  The following Vite config options will be overridden by SvelteKit:
    - base
   ✓  server  src/demo.spec.ts (1 test) 15ms
  1:40:41 PM [vite] (ssr) Error when evaluating SSR module /node_modules/@sveltejs/kit/src/runtime/server/index.js: Cannot read properties of undefined (reading 'wrapDynamicImport')
        at /Users/vr/Desktop/code/ch/ch_ui/node_modules/@sveltejs/kit/src/runtime/app/server/event.js:9:1
        at ESModulesEvaluator.runInlinedModule (file:///Users/vr/Desktop/code/ch/ch_ui/node_modules/vite/dist/node/module-runner.js:909:9)
        at SSRCompatModuleRunner.directRequest (file:///Users/vr/Desktop/code/ch/ch_ui/node_modules/vite/dist/node/module-runner.js:1067:80)
        at SSRCompatModuleRunner.directRequest (file:///Users/vr/Desktop/code/ch/ch_ui/node_modules/vite/dist/node/chunks/dep-BHkUv4Z8.js:18888:34)
        at SSRCompatModuleRunner.cachedRequest (file:///Users/vr/Desktop/code/ch/ch_ui/node_modules/vite/dist/node/module-runner.js:973:23)
        at request (file:///Users/vr/Desktop/code/ch/ch_ui/node_modules/vite/dist/node/module-runner.js:1014:76)
        at async eval (/Users/vr/Desktop/code/ch/ch_ui/node_modules/@sveltejs/kit/src/runtime/server/endpoint.js:4:1)
        at async ESModulesEvaluator.runInlinedModule (file:///Users/vr/Desktop/code/ch/ch_ui/node_modules/vite/dist/node/module-runner.js:909:3)
        at async SSRCompatModuleRunner.directRequest (file:///Users/vr/Desktop/code/ch/ch_ui/node_modules/vite/dist/node/module-runner.js:1067:59)
        at async SSRCompatModuleRunner.directRequest (file:///Users/vr/Desktop/code/ch/ch_ui/node_modules/vite/dist/node/chunks/dep-BHkUv4Z8.js:18888:22)
   ✓  client (chromium)  src/routes/page.svelte.test.ts (1 test) 5ms
   Test Files  2 passed (2)
        Tests  2 passed (2)
     Start at  13:40:39
     Duration  2.20s (transform 49ms, setup 4ms, collect 162ms, tests 20ms, environment 0ms, prepare 2.47s)
  

The tests are passing but what is this error and how do you fix this?