Nuxt - typescript error

When building with newly created nuxt app i've got an error:

node_modules/nuxt-icon/dist/runtime/Icon.vue:11:19 - error TS2352: Conversion of type 'AppConfig' to type '{ nuxtIcon: { size?: string | undefined; class?: string | undefined; aliases?: Record<string, string> | undefined; iconifyApiOptions?: { url?: string | undefined; publicApiFallback?: boolean | undefined; } | undefined; }; }' may be a mistake because neither type sufficiently overlaps with the other. If this was intentional, convert the expression to 'unknown' first.
Property 'nuxtIcon' is missing in type 'AppConfig' but required in type '{ nuxtIcon: { size?: string | undefined; class?: string | undefined; aliases?: Record<string, string> | undefined; iconifyApiOptions?: { url?: string | undefined; publicApiFallback?: boolean | undefined; } | undefined; }; }'.

11 const appConfig = useAppConfig() as {
~~~~~~~~~~~~~~~~~~~
12 nuxtIcon: {
~~~~~~~~~~~~~
...
20 }
~~~
21 }
~

Start with node_modules/nuxt-icon/dist/runtime/Icon.vue at the reported useAppConfig() cast on line 11, then reproduce the TypeScript build in a newly created Nuxt app. Check the resulting type error and verify that the build completes without TS2352.