Code works in Sandbox, but not locally

[dbousamra]

Hi all.

Apologies for the very vague description, but I wasn't sure what else to title it. The same code works in a Codesandbox, but not locally (even when locally is pared back and has same dependencies): https://codesandbox.io/s/frosty-wescoff-wiovtp?file=/src/index.tsx

Here's how it behaves locally:

https://user-images.githubusercontent.com/648137/179722118-6db24166-16d1-4be5-a80d-d3fd0aca3ae1.mp4

I am at a loss. Double checked versions, code etc.