env vars are not defined in nuxt layer

[ehibes]

Context

I'm trying to make a Nuxt layer, with a demo folder to extend the base/layer code. So, to launch the project, yarn dev is equivalent to nuxt dev demo

Issue

Env vars from .env file seems to not be read. Console logs returns undefined on nuxt.config.ts of the layer. If I launch the project without targeting the demo folder (nuxt dev), everything works.

https://stackblitz.com/edit/github-yzyan4?file=package.json,nuxt.config.ts