Why does "moduleResolution": "node" resolve my TS7016 errors when looking for a declaration file?

Question

I'm working on a few TS packages with the following setup and am getting TS7016 errors.

Module A (to-be-imported)

// package.json
 "name": 'module-a'
 ...
 "main": "./dist/index.js",
 "types": "./dist/types/index.d.ts",
 ...

// tsconfig.json
{
 "compilerOptions": {
 "module": "CommonJS",
 "target": "ES2018",
 "lib": ["es2016", "es2017.object", "es2017.string"],
 "declaration": true,
 "outDir": "./dist",
 "declarationDir": "./dist/types",
 "sourceMap": true,
 "declarationMap": true,
 "resolveJsonModule": true,
 "esModuleInterop": true
 },
 "include": ["src"]
}

Module B (trying to import module A)

import { TypeA, TypeB, ... } from 'module-a' <- results in TS7016 error

Module B's TSConfig

{
 "extends": "@tsconfig/node18",
 "compilerOptions": {
 "outDir": "./dist",
 "inlineSourceMap": true,
 "inlineSources": true,
 "experimentalDecorators": true,
 "rootDir": "."
 },
 "exclude": ["build", "node_modules", "dist"]
}

I believe the typescript is looking for the types in the root module instead of looking for it in the nested /types/ subdirectory

To resolve this, I've noticed 2 changes worked and I'm trying to understand why.

Option 1 - Change moduleResolution to node in ModuleB Requires changing module to commonjs since the default extend is using node16

{
 "extends": "@tsconfig/node18",
 "compilerOptions": {
 "outDir": "./dist",
 "inlineSourceMap": true,
 "inlineSources": true,
 "experimentalDecorators": true,
 "rootDir": ".",
 "moduleResolution": "node", // NEW
 "module": "commonjs" // NEW
 },
 "exclude": ["build", "node_modules", "dist"]
}

Option 2 - Changing the types to be output in the module-a's main dir

// updated module-a tsconfig
{
 "compilerOptions": {
 "module": "CommonJS",
 "target": "ES2018",
 "lib": ["es2016", "es2017.object", "es2017.string"],
 "declaration": true,
 "outDir": "./dist",
 "declarationDir": "./dist", // <-- UPDATED
 "sourceMap": true,
 "declarationMap": true,
 "resolveJsonModule": true,
 "esModuleInterop": true
 },
 "include": ["src"]
}

Both work, but I'm wondering if there's a benefit to keeping the declaration nested in the /types/ folder, or if it should just be in the root dir? TS documentation shows it in the main dir. https://www.typescriptlang.org/docs/handbook/declaration-files/publishing.html

Any context and information is appreciated. I'm still trying to learn about package.jsons and how these things come together.

• Matt Kantor: A note on terminology: I think that most places where you use the word "module" in this question you really mean "package". Every individual file is a "module", while a "package" is a collection of files with a package.json. A package can be made up of many modules.