Error: _mergeDefaults is not defined (in ^1.0)

I updated a module to use 1.0 and kept getting this error when actually using it. Version 0.8 works fine. Managed to replicate the issue, here's the repo (prepack + dev playground). Note I set the playground to link the parent module and use it as if it were a real dep, otherwise I can't replicate. In a real app, using a real published module I can also replicate.

Interestingly, using dev:prepare does not have the same issue.

The issue happens if a component imports an object and uses it as the defaults for a prop, the outputted code looks like this:

<script setup>
import { propDefaults } from "./defaults.js";
defineProps(/* @__PURE__ */ _mergeDefaults({
  color: { type: String, required: false },
  disabled: { type: Boolean, required: false }
}, {
  color: "blue",
  ...propDefaults
}));
</script>

If I remove propDefaults, because withDefaults is transformed away it works:

defineProps({
  color: { type: String, required: false, default: "blue" },
  disabled: { type: Boolean, required: false, default: false }
});

With 0.8 it used to just looked like this and worked fine:

<script setup  lang="ts">
import { propDefaults } from './defaults.js'

withDefaults(defineProps<{
  color?: string
  disabled?: boolean
}>(), {
  color: 'blue',
  ...propDefaults,
})
</script>

I know component's can't reference local objects because withDefaults is a compiler macro, but they can reference imports like this. Or at least, this had been working fine for me for a long time and I checked and it works fine on the Vue SFC playground too.

Start with the linked nuxt-module-builder-issue reproduction and compare the prepack playground path with dev:prepare. Inspect the generated component code around the imported propDefaults and _mergeDefaults call; done means the published-module path no longer produces an undefined helper while preserving imported prop defaults.