Coverage report is complaining about non existing lines of code

[Envoy49]

Have an issue after an update opened here as well vuejs/vue-jest#522, where tests coverage report is complaining about non existing lines of code.
Since I am using NUXT and had to upgrade to the latest NUXT Bridge.
Code coverage is complaining about my VUE code files not being covered.
Whereas most of them were covered on 100% according to old and correct report..
After an update coverage is complaining about lines which don't exist at all.
My overall coverage dropped from 70% to 40% due to this wrong report
Below is the screenshot of before and after results.

My current package.json

"dependencies": {
   "nuxt-edge": "latest",
 },

 "devDependencies": {
   "@vue/test-utils": "1.3.3",
   "@vue/vue2-jest": "29.0.0",  
   "vue-template-compiler": "^2.7.14"
 },

My previous package.json:

"dependencies": {
   "nuxt-edge": "^2.16.0-27358576.777a4b7f",
 },

 "devDependencies": {
   "@vue/test-utils": "^1.2.2",
   "@vue/vue2-jest": "^27.0.0-alpha.4",
 },

Solution from here vuejs/vue-jest#480 (comment) didn't help in my case