Does Nuxt Bridge migration upgrade to Vue 3 as well?

Question

I recently updated our app to use Nuxt Bridge following this guide: https://v3.nuxtjs.org/bridge/overview

We were previously on Vue 2.7.10 but now when I check my vue version using npm view vue version I get 3.2.39. But If I go into node_modules/vue/package.json I see this:

  "name": "vue",
  "version": "2.7.10",

I tried deleting node_modules, yarn.lock, .nuxt and explicitly added "vue":"3.2.39" to package.json then redid yarn install. After that I got an error about nuxt Cannot find module 'nuxt'.

So I guess my questions are: How can I tell which version of Vue I'm actually using in this project? My goal is to upgrade to Vue 3, is there an issue with Nuxt Bridge and Vue 3?