Webpack switching between watch and dev server issue

Steps to reproduce:

1. npm install
2. npm run dev and wait 10s or until node_modules/.cache folder appear/update
3. npm run watch open dist/index.html and look at browser console

You will see

Uncaught TypeError: Cannot read properties of undefined (reading 'dispose') at eval (index.css:7:18) at ./index.css (main.js:49:1) at webpack_require (main.js:73:41) at eval (index.js:2:68) at ./index.js (main.js:19:1) at webpack_require (main.js:73:41) at main.js:96:37 at main.js:98:12