defu is not a function error started after defu and rc9 update

[joshuawnc]

$ nuxt generate

03:19:44.180 | [fatal] defu is not a function
03:19:44.180 | at Object.update (node_modules_dev/rc9/dist/index.cjs:79:21)
03:19:44.181 | at node_modules_dev/@nuxt/image/dist/module.cjs:135:9
03:19:44.181 | at async Nuxt.callHook (node_modules_dev/hable/dist/hable.js:1:959)
03:19:44.181 | at async Builder.build (node_modules_dev/@nuxt/builder/dist/builder.js:333:5)
03:19:44.181 | at async ensureBuild (node_modules_dev/@nuxt/cli/dist/cli-generate.js:145:3)
03:19:44.181 | at async Object.run (node_modules_dev/@nuxt/cli/dist/cli-generate.js:283:7)
03:19:44.181 | at async NuxtCommand.run (node_modules_dev/@nuxt/cli/dist/cli-index.js:413:7)
03:19:44.186 |  
03:19:44.186 | ╭───────────────────────────────────────╮
03:19:44.187 | │ │
03:19:44.187 | │ ✖ Nuxt Fatal Error │
03:19:44.187 | │ │
03:19:44.187 | │ TypeError: defu is not a function │
03:19:44.187 | │ │
03:19:44.187 | ╰───────────────────────────────────────╯
03:19:44.187 |  
03:19:44.294 | error Command failed with exit code 1.
03:19:44.294 | info Visit https://yarnpkg.com/en/docs/cli/run for documentation about this command.
03:19:44.313 | Error: Command "yarn run now-build" exited with 1

[Daniel Roe]

I don't believe this is an issue with vercel-builder directly.