When should you use moduleResolution: "bundler" versus "nodenext"?

Question presented to candidate: "You are setting up the tsconfig for a new project. How do you decide between moduleResolution: \"bundler\" and \"nodenext\"? What does each one let you write, and what goes wrong if you pick the wrong one?"

What a strong answer should cover:

• Module resolution is how the compiler maps an import string to a file; the setting should model whatever will really load the code at run time
• bundler models Vite, webpack, esbuild and similar: extensionless relative imports and directory index files resolve, and package exports are read with the import and types conditions
• nodenext models Node.js: the importing file is ESM or CommonJS (from .mts/.cts or package.json "type"), ESM imports need the full .js extension (TS2835, TS2834), and exports use import or require accordingly
• Pairing rules: nodenext resolution requires module: "nodenext" (TS5110 / TS5109); in 5.4 bundler needs module preserve or ES2015+ (TS5095)
• The failure mode of choosing bundler for code Node runs directly: tsc is happy, Node throws ERR_MODULE_NOT_FOUND
• Rule of thumb: bundled apps use bundler; code that Node (or a published library's consumers) loads uses nodenext; nodenext-valid code also resolves under bundler

Clarifying questions expected:

• What actually runs the output: a bundler, Node directly, or both (a published library)?
• Is the package ESM ("type": "module") or CommonJS?

Code / implementation expected: Optional — two small tsconfigs and an import that one accepts and the other rejects.