Latest loopback mocha tests are not running

Describe the bug

Create a new lb app with node 16,
Trying to run the default tests that come with lb app, using yarn test, it immediately throws this typescript error. This seems to be a mocha issue, but why did Loopback upgrade to latest mocha?

ERR_REQUIRE_ESM errors with Mocha tests.

const stringWidth = require('string-width');
                    ^

Error [ERR_REQUIRE_ESM]: require() of ES Module /home/fahad/work/testapp/node_modules/string-width/index.js from /home/fahad/work/testapp/node_modules/yargs/node_modules/cliui/build/index.cjs not supported.
Instead change the require of index.js in /home/fahad/work/testapp/node_modules/yargs/node_modules/cliui/build/index.cjs to a dynamic import() which is available in all CommonJS modules.
    at Object.<anonymous> (/home/fahad/work/testapp/node_modules/yargs/node_modules/cliui/build/index.cjs:291:21)
    at Object.<anonymous> (/home/fahad/work/testapp/node_modules/yargs/build/index.cjs:2861:12)
    at Object.<anonymous> (/home/fahad/work/testapp/node_modules/yargs/yargs:3:69)
    at Object.<anonymous> (/home/fahad/work/testapp/node_modules/mocha/lib/cli/cli.js:15:15)
    at Object.<anonymous> (/home/fahad/work/testapp/node_modules/mocha/bin/mocha.js:141:3) {
  code: 'ERR_REQUIRE_ESM'
}

Logs

No response

Additional information

If I downgrade yargs library to 14.2.2, this issue is not occurring.

Reproduction

THIS ISSUE IS OBVIOUS

Eseguire yarn test in un'applicazione LoopBack appena creata con Node 16 e ispezionare la configurazione di test generata e le versioni delle dipendenze relative a Mocha e yargs. Il lavoro è completato quando i test Mocha predefiniti vengono eseguiti senza l'errore ERR_REQUIRE_ESM segnalato, mantenendo al contempo le versioni delle dipendenze previste.