Hi @Jesse Kuras ,
According to my research and testing, I reproduced your issue. If I upgrade the version of SPFX to v1.16.1, I will get the same error. As a workaround, I recommend that you can go back to a previous version, such as v1.16.0 .
Similar issue for reference: https://github.com/SharePoint/sp-dev-docs/issues/8623
Hope it can help you. Thanks for your understanding.
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