I suggest to add build.serverWatch option that will watch specified folders and restart nuxt server middleware in dev mode.
Now to rebuild nuxt server middleware you should change nuxt.config.js file.
Now to solve this issue I installed nodemon and changed package.json to
{
"scripts": {
"dev": "nodemon --watch api --exec \"nuxt\"",
},
}So I suggest to add build.serverWatch option in nuxt.config.js file to watch and restart nuxt server middleware in dev mode.