We have a special directory in nuxt called buildDir and by default is ${rootDir}/.nuxt used for
generated files such as templates, types, caches and build output.

Currently, we combine both into the same top-level directory structure which causes issues if at the same time build and start the development server they override each other. There are also directories that can leverage caching if left intact and separated including .nuxt/cache and .nuxt/dist (see #14605 useful for smart rebuild and project hashes)

This is a semi-breaking change if modules were implicitly depending on filesystem structure with full path of buildDir and hardcoded dirs (while they shouldn't) but probably worth doing this before final 3.0.0 release to improve long term caching of this directory.