I had the same issue. What worked for me is forcing updates on local npm packages:
npm update --force
Before
$ npm list chokidar
pwa-react-showcase@0.1.0
└─┬ react-scripts@4.0.3
└─┬ webpack-dev-server@3.11.1
└── chokidar@2.1.8
After
$ npm list chokidar
pwa-react-showcase@0.1.0
└─┬ react-scripts@4.0.3
├─┬ webpack-dev-server@3.11.1
│ └── chokidar@2.1.8
└─┬ webpack@4.44.2
└─┬ watchpack@1.7.5
├── chokidar@3.5.1
└─┬ watchpack-chokidar2@2.0.1
└── chokidar@2.1.8
Update
We found that NPM 7 was the issue. Downgrading to NPM 6.14.12 works without any changes.