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I understand why it works this way, but TS project references requiring a build step is such a giant pain in the ass

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Yes but for smaller monorepos I hate that I'm forced to either hack around tsc's shortcomings or bring in a whole new tool to complicate an otherwise perfect, simple setup with pnpm

for larger projects I get it, but the fewer tools I need the better. pnpm gets me 95% of the way there.