ENOTDIR Error after every "action"

[Tomek-N]

Hey,

I'm using VS Code by running it in Ubuntu WSL2... and initially package loads properly and shows which package is outdated, and quick fix works as expected... but after every change that this package makes it fails right away with the error below:

A system error occurred (ENOTDIR: not a directory, open '/home/user/project-name/package.json/node_modules/.modules.yaml')

Any Idea what can cause this and how to fix it? (only way to make it work again for now is "Developer: Reload window" from command palette... then it works again until next action/change. is made.