VSCode’s Find all references/Go to definition does not work

I have:

• mono repository, more projects inside
• js/ts, react

1. When Find all references is tried on react component (I suppose on anything) that is imported in another project inside monorepo, it starts finding references.
2. Initializing JS/TS language features starts – from Typescript and Javascript Language Features built-in extension.
3. It takes about 2 minutes (depends on project size)
4. After that references outside project/folder are not found
5. During that process I cannot use Go to definition

I have also solution and will be written in answer below to help other folks (maybe my future me :D) to not waste halfday as I did on this 😉