Why won't webpack ignore my node_modules?

Question

I have tried configuring it multiple ways and reduced the config file to a bare minimal but it always compiles my node_modules folder.

I have tried using a regular expression as seen below, as well as inserting the direct path.

Webpack requires direct paths which I am using instead of the path module for clarity.

Webpack config file

// style-loader and css-loader are both required to handle .css files
const css = {
  test: /\.css$/i,
  use: ['style-loader', 'css-loader'],
};

// babel-loader handles .js and .jsx files
const jsx = {
  test: /\.jsx?/,
  exclude: [
    /node_modules/
  ],
  use: {
    loader: 'babel-loader',
    options: {
      presets: ['@babel/preset-env', '@babel/preset-react']
    }
  }
};

// this webpack configuration file supports these two file types
const file_types = {
  rules: [
    css,
    jsx
  ]
};

const input = '/Users/c/top/frame/index.jsx';

const output = {
  filename: 'bundle.js',
  path: '/Users/c/top/frame-server/dist'
};

const stats = { warnings: true };

// combine above objects and export
const config_obj = {
  stats:          stats,
  entry:          input,
  output:         output,
  module:         file_types
};

module.exports = (env) => {
  return config_obj;
};

Yet still I see them compiled:

asset bundle.js 209 KiB [compared for emit] [minimized] (name: main) 1 related asset
orphan modules 787 KiB [orphan] 460 modules
runtime modules 663 bytes 3 modules
cacheable modules 375 KiB
  modules by path ./node_modules/ 155 KiB 22 modules
  modules by path ./A1People/ 4.31 KiB 6 modules
  modules by path ./F1PageUser/ 4.9 KiB 5 modules
  modules by path ./F1Apex/ 2.87 KiB 4 modules
  modules by path ./A1Article/ 3.43 KiB 4 modules
  modules by path ./F1M1/ 2.9 KiB 4 modules
  modules by path ./C0Images/ 2.02 KiB 3 modules
  modules by path ./C2Menu/ 2.04 KiB 3 modules
  modules by path ./C3BarAdmin/ 1.56 KiB
    ./node_modules/css-loader/dist/cjs.js!./C3BarAdmin/C3BarAdmin.css 504 bytes [built] [code generated]
    + 2 modules
  + 8 modules
webpack 5.69.1 compiled with 2 warnings in 6635 ms

I am following the documentation by webpack found here.

and version as follows:

"webpack": "^5.69.1",
"webpack-cli": "^4.9.2"

I am getting a strange warning but I don't know if it is relevant:

WARNING in ./node_modules/React/cjs/react.production.min.js
There are multiple modules with names that only differ in casing.
This can lead to unexpected behavior when compiling on a filesystem with other case-semantic.
Use equal casing. Compare these module identifiers:
* /Users/c/top/frame/node_modules/React/cjs/react.production.min.js
    Used by 1 module(s), i. e.
    /Users/c/top/frame/node_modules/React/index.js
* /Users/c/top/frame/node_modules/react/cjs/react.production.min.js
    Used by 1 module(s), i. e.
    /Users/c/top/frame/node_modules/react/index.js
 @ ./node_modules/React/index.js 4:2-59
 @ ./F1PageUser/ULogin.jsx 2:0-26 5:22-41 7:18-37 9:18-37 11:31-50
 @ ./F1PageUser/User.jsx 4:0-34 14:47-53
 @ ./F1Page/F1Page.jsx 8:0-44 21:57-63
 @ ./F1/F1.jsx 5:0-42 18:184-190
 @ ./index.jsx 8:0-29 12:36-38