`npx serve .` does not always serve the current directory

Description

We have a Vue JS application with the following file hierarchy :

• vue/
  • .turbo/
  • dist/
    • index.html
    • assets/
      • ...
  • src/
    • ...
  • index.html
  • package.json
  • ...

When trying to serve files from the dist/ directory using the command npx serve dist everything work as intended. However, if I cd into the dist directory from the vue directory and run npx serve . or simply npx serve, the file that is served is vue/index.html instead of vue/dist/index.html (as if the root of the server was vue/ instead of vue/dist/).

I found out that if I delete the vue/package.json file and restart npx serve in vue/dist, the right files are served.

Is this an expected behaviour to use the nearest package.json location as server root ? For me, it seems strange that the root is not the directory from which npx serve . is being executed.

Library version

14.2.3

Node version

18.18.2