[Watch mode issue] Webpack watch not working with webpack-cli@4 #1923

Describe the bug

When using watch mode as given in the following webpack.config.js:

module.exports = () => ({
    entry: path.resolve(__dirname, 'src/index.ts'),
    mode: NODE_ENV,
    watch: true,
    target: 'node',
...
// rest of config (uninportant I think)
...
}

with these dependencies for webpack:

    "webpack": "4.44.2",
    "webpack-cli": "4.0.0"

Webpack will not run with watch mode on.
But with the following deps it will run as expected:

    "webpack": "4.44.2",
    "webpack-cli": "3.3.12"

Also should mention that I am using:

yarn version - 1.22.4
node version - v14.13.0

What is the current behavior?

The compilation starts and finishes without any error, but it does not continue to watch for changes.
It acts as if watch is disabled.

To Reproduce

1. Clone my example repo
2. run yarn install
3. run yarn test
   • Observer the problem
4. run ./swapDeps.sh (or swap deps manually)
5. run yarn test
   • Observe functioning watch mode

Alternatively just install the mentioned deps and try to run webpack in watch mode.
Then switch them for the working ones and run again.

Expected behavior

Webpack will run in watch mode consistently with [email protected] as
it works with [email protected]