VS Code Unable to resolve path to module error on non-relative paths

I have a JavaScript Next.js project configured to treat “@” as root, and the auto-import configured to write the imports as @/folder1/folder2.

ESLint does not show an import error on relative paths (like ./folder1/folder2) but it does for @/folder1/folder2.

What should I change to make VS Code or ESLint treat the non-relative path properly and not show an error when non-relative paths are used?