Type Error when setting telemetry: false in nuxt.config.ts within Monorepo

[samydoesit]

We are encountering a type error in our monorepo setup when setting telemetry: false in the nuxt.config.ts file.

Error Details:

When telemetry: false is added to the configuration, we see the following error:

Type 'false' has no properties in common with type 'Partial<TelemetryOptions>'.(2559)
schema.d.ts(21, 5): The expected type comes from property 'telemetry' which is declared here on type 'InputConfig<NuxtConfig, ConfigLayerMeta>'
(property) NuxtConfig["telemetry"]?: Partial<TelemetryOptions> | undefined

This issue persists in our monorepo even after running nuxt prepare. However, I was able to reproduce this with a fresh Nuxt project on Stackblitz, but the error appears only on the first run.
Once the nuxt prepare step is ran a second time in Stackblitz, the error no longer occurs.

Steps to Reproduce:

1. Open a new Nuxt project on Stackblitz using this link: https://nuxt.new/s/v3
2. Stop the dev server.
3. In the nuxt.config.ts, add telemetry: false,.
4. Observe the Nuxt error that appears.

Additional Notes:

In the monorepo, the error persists despite running nuxt prepare multiple times.

telemetry-false-problem.mov