diff --git a/packages/playwright-test/src/experimentalLoader.ts b/packages/playwright-test/src/experimentalLoader.ts
index 3a033e05c8..c3fe0aa88a 100644
--- a/packages/playwright-test/src/experimentalLoader.ts
+++ b/packages/playwright-test/src/experimentalLoader.ts
@@ -16,7 +16,7 @@
 
 import fs from 'fs';
 import url from 'url';
-import { transformHook, resolveHook } from './transform';
+import { transformHook, resolveHook, belongsToNodeModules } from './transform';
 
 async function resolve(specifier: string, context: { parentURL: string }, defaultResolve: any) {
   if (context.parentURL && context.parentURL.startsWith('file://')) {
@@ -29,13 +29,27 @@ async function resolve(specifier: string, context: { parentURL: string }, defaul
 }
 
 async function load(moduleUrl: string, context: any, defaultLoad: any) {
-  if (moduleUrl.startsWith('file://') && (moduleUrl.endsWith('.ts') || moduleUrl.endsWith('.tsx'))) {
-    const filename = url.fileURLToPath(moduleUrl);
-    const code = fs.readFileSync(filename, 'utf-8');
-    const source = transformHook(code, filename, moduleUrl);
-    return { format: 'module', source };
-  }
-  return defaultLoad(moduleUrl, context, defaultLoad);
+  // Bail out for wasm, json, etc.
+  // non-js files have context.format === undefined
+  if (context.format !== 'commonjs' && context.format !== 'module' && context.format !== undefined)
+    return defaultLoad(moduleUrl, context, defaultLoad);
+
+  // Bail for built-in modules.
+  if (!moduleUrl.startsWith('file://'))
+    return defaultLoad(moduleUrl, context, defaultLoad);
+
+  if (!moduleUrl.startsWith('file://'))
+    return defaultLoad(moduleUrl, context, defaultLoad);
+
+  const filename = url.fileURLToPath(moduleUrl);
+  // Bail for node_modules.
+  if (belongsToNodeModules(filename))
+    return defaultLoad(moduleUrl, context, defaultLoad);
+
+  const code = fs.readFileSync(filename, 'utf-8');
+  const source = transformHook(code, filename, moduleUrl);
+  // Output format is always the same as input format, if it was unknown, we always report modules.
+  return { format: context.format || 'module', source };
 }
 
 module.exports = { resolve, load };
diff --git a/packages/playwright-test/src/transform.ts b/packages/playwright-test/src/transform.ts
index 85b17ae16b..0d67f5c1d9 100644
--- a/packages/playwright-test/src/transform.ts
+++ b/packages/playwright-test/src/transform.ts
@@ -135,7 +135,7 @@ export function resolveHook(filename: string, specifier: string): string | undef
         if (value.includes('*'))
           candidate = candidate.replace('*', matchedPartOfSpecifier);
         candidate = path.resolve(tsconfig.absoluteBaseUrl, candidate.replace(/\//g, path.sep));
-        for (const ext of ['', '.js', '.ts', '.mjs', '.cjs', '.jsx', '.tsx']) {
+        for (const ext of ['', '.js', '.ts', '.mjs', '.cjs', '.jsx', '.tsx', '.cjs', '.mts', '.cts']) {
           if (fs.existsSync(candidate + ext)) {
             if (keyPrefix.length > longestPrefixLength) {
               longestPrefixLength = keyPrefix.length;
@@ -162,15 +162,11 @@ export function transformHook(code: string, filename: string, moduleUrl?: string
   // If we are not TypeScript and there is no applicable preprocessor - bail out.
   const isModule = !!moduleUrl;
   const isTypeScript = filename.endsWith('.ts') || filename.endsWith('.tsx');
-  const isJSX = filename.endsWith('.jsx');
   const hasPreprocessor =
       process.env.PW_TEST_SOURCE_TRANSFORM &&
       process.env.PW_TEST_SOURCE_TRANSFORM_SCOPE &&
       process.env.PW_TEST_SOURCE_TRANSFORM_SCOPE.split(pathSeparator).some(f => filename.startsWith(f));
 
-  if (!isTypeScript && !isJSX && !hasPreprocessor)
-    return code;
-
   const cachePath = calculateCachePath(code, filename, isModule);
   const codePath = cachePath + '.js';
   const sourceMapPath = cachePath + '.map';
@@ -212,11 +208,11 @@ export function installTransform(): () => void {
   }
   (Module as any)._resolveFilename = resolveFilename;
 
-  const exts = ['.ts', '.tsx', '.jsx'];
-  // When script preprocessor is engaged, we transpile JS as well.
-  if (scriptPreprocessor)
-    exts.push('.js', '.mjs');
-  const revertPirates = pirates.addHook((code: string, filename: string) => transformHook(code, filename), { exts });
+  const revertPirates = pirates.addHook((code: string, filename: string) => {
+    if (belongsToNodeModules(filename))
+      return code;
+    return transformHook(code, filename);
+  }, { exts: ['.ts', '.tsx', '.js', '.jsx', '.mjs'] });
 
   return () => {
     reverted = true;
@@ -248,3 +244,13 @@ export function wrapFunctionWithLocation<A extends any[], R>(func: (location: Lo
     return func(location, ...args);
   };
 }
+
+export function belongsToNodeModules(file: string) {
+  if (file.includes(`${path.sep}node_modules${path.sep}`))
+    return true;
+  if (file.includes(`${path.sep}playwright${path.sep}packages${path.sep}playwright`))
+    return true;
+  if (file.includes(`${path.sep}playwright${path.sep}tests${path.sep}config${path.sep}coverage.js`))
+    return true;
+  return false;
+}
diff --git a/tests/components/ct-vue-vite/src/notation-vue.spec.js b/tests/components/ct-vue-vite/src/notation-vue.spec.js
new file mode 100644
index 0000000000..1bfe754604
--- /dev/null
+++ b/tests/components/ct-vue-vite/src/notation-vue.spec.js
@@ -0,0 +1,81 @@
+import { test, expect } from '@playwright/experimental-ct-vue'
+
+import has from 'has'
+import Button from './components/Button.vue'
+import DefaultSlot from './components/DefaultSlot.vue'
+import NamedSlots from './components/NamedSlots.vue'
+import Component from './components/Component.vue'
+
+test.use({ viewport: { width: 500, height: 500 } })
+
+test('props should work', async ({ mount }) => {
+  const component = await mount(Button, {
+    props: {
+      title: 'Submit'
+    }
+  })
+  await expect(component).toContainText('Submit')
+})
+
+test('event should work', async ({ mount }) => {
+  const messages = []
+  const component = await mount(Button, {
+    props: {
+      title: 'Submit'
+    },
+    on: {
+      submit: data => messages.push(data)
+    }
+  })
+  await component.click()
+  expect(messages).toEqual(['hello'])
+})
+
+test('default slot should work', async ({ mount }) => {
+  const component = await mount(DefaultSlot, {
+    slots: {
+      default: 'Main Content'
+    }
+  })
+  await expect(component).toContainText('Main Content')
+})
+
+test('multiple slots should work', async ({ mount }) => {
+  const component = await mount(DefaultSlot, {
+    slots: {
+      default: ['one', 'two']
+    }
+  })
+  await expect(component).toContainText('one')
+  await expect(component).toContainText('two')
+})
+
+test('named slots should work', async ({ mount }) => {
+  const component = await mount(NamedSlots, {
+    slots: {
+      header: 'Header',
+      main: 'Main Content',
+      footer: 'Footer'
+    }
+  })
+  await expect(component).toContainText('Header')
+  await expect(component).toContainText('Main Content')
+  await expect(component).toContainText('Footer')
+})
+
+test('optionless should work', async ({ mount }) => {
+  const component = await mount(Component)
+  await expect(component).toContainText('test')
+})
+
+test('should run hooks', async ({ page, mount }) => {
+  const messages = []
+  page.on('console', m => messages.push(m.text()))
+  await mount(Button, {
+    props: {
+      title: 'Submit'
+    },
+    hooksConfig: { route: 'A' }
+  })
+  expect(messages).toEqual(['Before mount: {\"route\":\"A\"}, app: true', 'After mount el: HTMLButtonElement'])
+})
diff --git a/tests/library/component-parser.spec.ts b/tests/library/component-parser.spec.ts
index 82f91e91da..86ded3acee 100644
--- a/tests/library/component-parser.spec.ts
+++ b/tests/library/component-parser.spec.ts
@@ -16,7 +16,7 @@
 
 import { playwrightTest as it, expect } from '../config/browserTest';
 import type { AttributeSelector } from '../../packages/playwright-core/src/server/isomorphic/selectorParser';
-import { parseAttributeSelector } from '../../packages/playwright-core/src/server/isomorphic/selectorParser';
+import { parseAttributeSelector } from '../../packages/playwright-core/lib/server/isomorphic/selectorParser';
 
 const parse = (selector: string) => parseAttributeSelector(selector, false);
 const serialize = (parsed: AttributeSelector) => {
diff --git a/tests/playwright-test/loader.spec.ts b/tests/playwright-test/loader.spec.ts
index fbbdf86124..e01aae4567 100644
--- a/tests/playwright-test/loader.spec.ts
+++ b/tests/playwright-test/loader.spec.ts
@@ -28,7 +28,8 @@ test('should return the location of a syntax error', async ({ runInlineTest }) =
   expect(result.exitCode).toBe(1);
   expect(result.passed).toBe(0);
   expect(result.failed).toBe(0);
-  expect(result.output).toContain('error.spec.js:6');
+  expect(result.output).toContain('error.spec.js');
+  expect(result.output).toContain('(6:18)');
 });
 
 test('should print an improper error', async ({ runInlineTest }) => {
@@ -163,19 +164,17 @@ test('should load an mjs file', async ({ runInlineTest }) => {
   expect(exitCode).toBe(0);
 });
 
-test('should throw a nice error if a js file uses import', async ({ runInlineTest }) => {
-  const { exitCode, output } = await runInlineTest({
+test('should allow using import', async ({ runInlineTest }) => {
+  const { exitCode } = await runInlineTest({
     'a.spec.js': `
         import fs from 'fs';
-        const { test } = folio;
+        const { test } = pwt;
         test('succeeds', () => {
           expect(1 + 1).toBe(2);
         });
       `
   });
-  expect(exitCode).toBe(1);
-  expect(output).toContain('a.spec.js');
-  expect(output).toContain('Cannot use import statement outside a module');
+  expect(exitCode).toBe(0);
 });
 
 test('should load esm when package.json has type module', async ({ runInlineTest }) => {
diff --git a/tests/playwright-test/reporter-base.spec.ts b/tests/playwright-test/reporter-base.spec.ts
index 7955d259ff..7322fe3a37 100644
--- a/tests/playwright-test/reporter-base.spec.ts
+++ b/tests/playwright-test/reporter-base.spec.ts
@@ -261,8 +261,9 @@ test('should print errors with inconsistent message/stack', async ({ runInlineTe
   });
   expect(result.exitCode).toBe(1);
   expect(result.failed).toBe(1);
-  expect(result.output).toContain('hi!Error: Hello');
-  expect(result.output).toContain('at myTest');
+  const output = stripAnsi(result.output);
+  expect(output).toContain('hi!Error: Hello');
+  expect(output).toContain('function myTest');
 });
 
 test('should print "no tests found" error', async ({ runInlineTest }) => {