Babel caching error in start & build after upgrading to react-scripts 5.0.1

[paolavness]

Aloha,
After upgrading to react-scripts 5.0.1 I'm getting the Babel caching error

Line 0:  Parsing error: Caching was left unconfigured. Babel's plugins, presets, and .babelrc.js files can be configured...
This error was not happening before upgrading.

To resolve, I added cache commands to babel.config.js and although this works, it works on the initial start but on subsequent starts fails. To resolve the latter, I need to toggle between different caching commands before each start (or simply adding a new line and saving the file (!!!))). Both of these resolutions fail to resolve the caching error occurring on build.

My babel.config.js:

module.exports = function (api) {
	// api.cache(true);
	// api.cache.forever();
	api.cache.never();
	return {
		plugins: ["macros"],
	};
};

Also tried using .babelrc file instead, but the outcome is similar.

I'm using CRACO and env-cmd.

Any one experienced something similar and have any insights?