Webpack build showing TS errors on node_modules instead of my code

I can't figure out why when I run my webpack.config that it's not showing me TS errors on my prod code. It's showing errors on node_modules only.

Furthermore, it looks like it's also hitting bundles of each of those node_modules.

Here's my run script: NODE_ENV=production webpack -p --env=prod

web.config.js

const path = require('path');
const { CleanWebpackPlugin } = require('clean-webpack-plugin');
const TerserJSPlugin = require('terser-webpack-plugin');
const HtmlWebPackPlugin = require('html-webpack-plugin');
const MiniCssExtractPlugin = require('mini-css-extract-plugin');
const OptimizeCSSAssetsPlugin = require('optimize-css-assets-webpack-plugin');
const CopyPlugin = require('copy-webpack-plugin');

const isProduction = process.env.NODE_ENV === 'production';

const html = () => {
  return new HtmlWebPackPlugin({
    template: path.resolve(__dirname, 'src/client', 'index.html'),
    filename: 'index.html',
    hash: true,
  });
};

const copyAllOtherDistFiles = () => {
  return new CopyPlugin({
    patterns: [
      { from: 'src/client/assets', to: 'lib/assets' },
      { from: 'src/server.ts', to: './' },
      { from: 'src/api.ts', to: './' },
      { from: 'package.json', to: './' },
      { from: 'ext/ink-3.1.10/js/ink-all.min.js', to: 'lib/js' },
      { from: 'ext/ink-3.1.10/js/autoload.min.js', to: 'lib/js' },
      { from: 'ext/js/jquery-2.2.3.min.js', to: 'lib/js' },
      { from: 'ext/ink-3.1.10/css/ink.min.css', to: 'lib/css/ink.min.css' },
      { from: 'feed.xml', to: './' },
      {
        from: 'src/shared',
        to: './shared',
        globOptions: {
          ignore: ['**/*supressed.json'],
        },
      },
    ],
  });
};

module.exports = {
  entry: './src/client/index.tsx',
  output: {
    filename: 'scripts/app.[hash].bundle.js',
    publicPath: '/',
    path: path.resolve(__dirname, 'dist'),
  },
  resolve: {
    extensions: ['.ts', '.tsx', '.js'],
  },
  devtool: 'inline-source-map',
  devServer: {
    writeToDisk: true,
    port: 8080,
  },
  target: 'web',
  optimization: {
    minimizer: [new TerserJSPlugin({}), new OptimizeCSSAssetsPlugin({})],
    splitChunks: {
      cacheGroups: {
        styles: {
          name: 'styles',
          test: /\.css$/,
          chunks: 'all',
          enforce: true,
        },
      },
    },
  },
  module: {
    rules: [
      {
        test: /\.(js)$/,
        exclude: /node_modules/,
        use: {
          loader: 'babel-loader',
        },
      },
      {
        test: /\.(tsx|ts)?$/,
        use: 'ts-loader',
        exclude: /node_modules/,
      },
      {
        test: /\.html$/,
        use: [
          {
            loader: 'html-loader',
          },
        ],
      },
      {
        test: /\.less$/,
        use: [MiniCssExtractPlugin.loader, 'css-loader', 'less-loader'],
      },
      {
        test: /\.css$/,
        use: [
          {
            loader: MiniCssExtractPlugin.loader,
            options: {
              hmr: process.env.NODE_ENV === 'development',
            },
          },
          'css-loader',
        ],
      },
      {
        test: /\.(woff|woff2|eot|ttf|otf)$/,
        loader: 'file-loader',
        options: {
          outputPath: 'lib/assets/fonts',
        },
      },
      {
        test: /\.(png|svg|jpg|gif)$/,
        use: ['url-loader'],
      },
    ],
  },
  plugins: isProduction
    ? [
        new CleanWebpackPlugin(),
        new MiniCssExtractPlugin({
          filename: isProduction ? 'lib/css/main.[hash].css' : 'main.css',
        }),
        html(),
        copyAllOtherDistFiles(),
      ]
    : [new CleanWebpackPlugin(), html(), copyAllOtherDistFiles()],
};

tsconfig.json

{
  "compilerOptions": {
    /* Visit https://aka.ms/tsconfig.json to read more about this file */
    "target": "es6",                     /* Specify ECMAScript target version: 'ES3' (default), 'ES5', 'ES2015', 'ES2016', 'ES2017', 'ES2018', 'ES2019', 'ES2020', or 'ESNEXT'. */
    "module": "es6",                     /* Specify module code generation: 'none', 'commonjs', 'amd', 'system', 'umd', 'es2015', 'es2020', or 'ESNext'. */
    "lib": ["es6"],                      /* Specify library files to be included in the compilation. */
    "allowJs": true,                     /* Allow javascript files to be compiled. */
    "checkJs": true,                     /* Report errors in .js files. */
    "jsx": "react",
    "noImplicitAny": true,
    "sourceMap": true,                   /* Generates corresponding '.map' file. */
    "outDir": "dist",                   /* Redirect output structure to the directory. */
    "rootDir": "./",                     /* Specify the root directory of input files. Use to control the output directory structure with --outDir. */
    "removeComments": true,              /* Do not emit comments to output. */
    "strict": true,                      /* Enable all strict type-checking options. */
    "noUnusedLocals": true,                /* Report errors on unused locals. */
    "noUnusedParameters": true,            /* Report errors on unused parameters. */
    "rootDirs": ["."],                        /* List of root folders whose combined content represents the structure of the project at runtime. */
    "typeRoots": [
      "node_modules/@types"
    ],                      /* List of folders to include type definitions from. */
    "allowSyntheticDefaultImports": true,  /* Allow default imports from modules with no default export. This does not affect code emit, just typechecking. */
    "preserveSymlinks": true,              /* Do not resolve the real path of symlinks. */
//      "resolveJsonModule": true,
    "skipLibCheck": true,                     /* Skip type checking of declaration files. */
    "forceConsistentCasingInFileNames": true,
    },
    "include": [
        "src"
    ],
    "exclude": [
    "node_modules",
        "**/test"
  ]
}

Here's a bit of my folder structure