Using `nuxi --dotenv .env.staging` not working as expected inside NX monorepo

[L422Y]

Environment

root nx project

• Operating System: Darwin
• Node Version: v20.12.2
• Nuxt Version: -
• CLI Version: 3.12.0
• Nitro Version: -
• Package Manager: pnpm@9.0.6
• Builder: -
• User Config: -
• Runtime Modules: -
• Build Modules: -

apps/backend project

• Operating System: Darwin
• Node Version: v20.12.2
• Nuxt Version: 3.12.2
• CLI Version: 3.12.0
• Nitro Version: -
• Package Manager: pnpm@9.0.6
• Builder: -
• User Config: devtools, runtimeConfig
• Runtime Modules: -
• Build Modules: -

Reproduction

stackblitz.com/github/L422Y/nuxt-nx-bug
github.com/L422Y/nuxt-nx-bug

Describe the bug

We have a Nuxt app that is part of a Nx workspace. There is a .env and a .env.staging file in the root of the apps/backend Nuxt app. The .env.staging file should be used when running the dev:staging task.

The problem is that when the dev:staging task is run, the .env file is used instead of the .env.staging file, even though the appropriate command is run in the correct directory (or it appears to be).

When the nuxi dev --dotenv .env.staging command is run manually in the apps/backend directory, it works as expected.

Not sure if this is a bug in Nx, Nuxt, or something else.

Steps to reproduce

1. Clone this repository
2. Run pnpm install

Regular dev mode (works)

1. Run pnpx nx run backend:dev
2. Check the console output, nuxt dev is run
3. Check the app in the browser, it shows .env / default as expected

Staging dev mode (doesn't work)

1. Run pnpx nx run backend:dev:staging
2. Check the console output, nuxi dev --dotenv .env.staging is run
3. Check the app in the browser, it shows .env / default instead of .env.staging / staging

Manually running the staging command (works)

1. Run cd apps/backend
2. Run nuxi dev --dotenv .env.staging
3. Check the app in the browser, it shows .env.staging / staging as expected

Additional context

No response

Logs

No response