I've created my own npm package, let's call it XYZ, it has @material-ui dependency in it's package.json file.
When I install it in project A I have nested node_modules inside of XYZ folder(so it's A\node_modules\XYZ\node_modules\@material-ui), but when I install it in project B I don't have nested node_modules folder. Both project A and B has @material-ui in their package.json files with same versions.
How to force my XYZ package to use @material-ui from A\node_modules?
There are upside of having less nested folders and downside having more folders in node_modules folder directly and version control problems.
Correct yarn and npm (ie: npm v3) should not have such structure issue. It should always flatten the whole structure where possible and only have nested node_modules if the versions are incompatible with the one at top.
So if you have it working properly on one project and not on another, its probably due to version. Check out if the @material-ui is same version on both. Maybe two different packages are conflicting with each other at some point.
From your question, it says it's same version. However, you did not mention how you installed your package on both project. If you install with yarn link or npm link it should install dependencies properly as expected.
If you check the package, recently material-ui has been deprecated, and the notice says to upgrade to @material-ui/core instead. It might be some packages inside that folder is not same. Either way, it's like this whenever there is some dependency conflict. Check inside the @material-ui folder.
There are several packages to forcefully resolve this issue. They will go thru the nested node_modules folders and flatten them into single folder.
flatten-packagesnpm install -g flatten-packages.flatten-packages to rearrange all packages in node_modules folder in the project directory.