@playwright/test was transforming all JSX through Playwright’s custom runtime, which emits serialized __pw_type objects. In non-CT scenarios this breaks React server rendering (renderToStaticMarkup), matching the repro where valid JSX code fails at runtime.

• Runtime selection fix in Babel transform

  • Updated JSX transform runtime selection in packages/playwright/bundles/babel/src/babelBundleImpl.ts.
  • Default path now uses React runtime (importSource: 'react').
  • Playwright runtime (importSource: path.dirname(require.resolve('playwright'))) is now selected only when the CT plugin prologue includes playwright-ct-core’s tsxTransform.

• Regression coverage aligned to actual failure mode

  • Updated tests/playwright-test/loader.spec.ts to validate default Playwright Test JSX behavior with react-dom/server.
  • Test now asserts JSX renders as real React elements instead of asserting internal __pw_type object shape.

• Bug documentation

  • Added BUG_DIAGNOSIS.md with root cause and scope:
    • why non-CT JSX was incorrectly compiled to Playwright element objects
    • why React static HTML generation fails in that mode
    • how runtime selection is now scoped correctly

// before: always Playwright runtime
importSource: path.dirname(require.resolve('playwright'))

// after: React by default, Playwright only for CT transform
importSource: isComponentTestingTransform
  ? path.dirname(require.resolve('playwright'))
  : 'react'

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