diff --git a/src/compiler/moduleNameResolver.ts b/src/compiler/moduleNameResolver.ts
index 3c65e4410bd..652ab99abdb 100644
--- a/src/compiler/moduleNameResolver.ts
+++ b/src/compiler/moduleNameResolver.ts
@@ -2227,7 +2227,7 @@ namespace ts {
             function toAbsolutePath(path: string | undefined): string | undefined;
             function toAbsolutePath(path: string | undefined): string | undefined {
                 if (path === undefined) return path;
-                return hostGetCanonicalFileName({ useCaseSensitiveFileNames })(getNormalizedAbsolutePath(path, state.host.getCurrentDirectory?.()));
+                return getNormalizedAbsolutePath(path, state.host.getCurrentDirectory?.());
             }
 
             function combineDirectoryPath(root: string, dir: string) {
diff --git a/tests/baselines/reference/tscWatch/forceConsistentCasingInFileNames/with-nodeNext-resolution.js b/tests/baselines/reference/tscWatch/forceConsistentCasingInFileNames/with-nodeNext-resolution.js
index 2e965971da3..efcf899a34f 100644
--- a/tests/baselines/reference/tscWatch/forceConsistentCasingInFileNames/with-nodeNext-resolution.js
+++ b/tests/baselines/reference/tscWatch/forceConsistentCasingInFileNames/with-nodeNext-resolution.js
@@ -54,9 +54,9 @@ File '/Users/name/projects/web/node_modules/yargs.tsx' does not exist.
 File '/Users/name/projects/web/node_modules/yargs.d.ts' does not exist.
 Found 'package.json' at '/Users/name/projects/web/node_modules/@types/yargs/package.json'.
 'package.json' does not have a 'typesVersions' field.
-File '/users/name/projects/web/node_modules/@types/yargs/index.d.ts' exist - use it as a name resolution result.
-Resolving real path for '/users/name/projects/web/node_modules/@types/yargs/index.d.ts', result '/Users/name/projects/web/node_modules/@types/yargs/index.d.ts'.
-======== Module name 'yargs' was successfully resolved to '/users/name/projects/web/node_modules/@types/yargs/index.d.ts' with Package ID 'yargs/index.d.ts@17.0.12'. ========
+File '/Users/name/projects/web/node_modules/@types/yargs/index.d.ts' exist - use it as a name resolution result.
+Resolving real path for '/Users/name/projects/web/node_modules/@types/yargs/index.d.ts', result '/Users/name/projects/web/node_modules/@types/yargs/index.d.ts'.
+======== Module name 'yargs' was successfully resolved to '/Users/name/projects/web/node_modules/@types/yargs/index.d.ts' with Package ID 'yargs/index.d.ts@17.0.12'. ========
 File '/users/name/projects/web/node_modules/@types/yargs/package.json' exists according to earlier cached lookups.
 ======== Resolving type reference directive 'yargs', containing file '/Users/name/projects/web/__inferred type names__.ts', root directory '/Users/name/projects/web/node_modules/@types'. ========
 Resolving with primary search path '/Users/name/projects/web/node_modules/@types'.
@@ -69,15 +69,6 @@ Resolving real path for '/Users/name/projects/web/node_modules/@types/yargs/inde
 File '/a/lib/package.json' does not exist.
 File '/a/package.json' does not exist.
 File '/package.json' does not exist according to earlier cached lookups.
-src/bin.ts:1:21 - error TS1261: Already included file name '/users/name/projects/web/node_modules/@types/yargs/index.d.ts' differs from file name '/Users/name/projects/web/node_modules/@types/yargs/index.d.ts' only in casing.
-  The file is in the program because:
-    Imported via "yargs" from file '/Users/name/projects/web/src/bin.ts' with packageId 'yargs/index.d.ts@17.0.12'
-    Entry point for implicit type library 'yargs' with packageId 'yargs/index.d.ts@17.0.12'
-  File is CommonJS module because '/users/name/projects/web/node_modules/@types/yargs/package.json' does not have field "type"
-
-1 import { foo } from "yargs";
-                      ~~~~~~~
-
 ../../../../a/lib/lib.d.ts
   Default library for target 'es3'
 node_modules/@types/yargs/index.d.ts
@@ -87,7 +78,7 @@ node_modules/@types/yargs/index.d.ts
 src/bin.ts
   Matched by default include pattern '**/*'
   File is CommonJS module because 'package.json' was not found
-[12:00:38 AM] Found 1 error. Watching for file changes.
+[12:00:38 AM] Found 0 errors. Watching for file changes.
 
 
 
@@ -96,12 +87,12 @@ Program options: {"moduleResolution":99,"forceConsistentCasingInFileNames":true,
 Program structureReused: Not
 Program files::
 /a/lib/lib.d.ts
-/users/name/projects/web/node_modules/@types/yargs/index.d.ts
+/Users/name/projects/web/node_modules/@types/yargs/index.d.ts
 /Users/name/projects/web/src/bin.ts
 
 Semantic diagnostics in builder refreshed for::
 /a/lib/lib.d.ts
-/users/name/projects/web/node_modules/@types/yargs/index.d.ts
+/Users/name/projects/web/node_modules/@types/yargs/index.d.ts
 /Users/name/projects/web/src/bin.ts
 
 Shape signatures in builder refreshed for::
@@ -115,7 +106,7 @@ WatchedFiles::
 /users/name/projects/web/src/bin.ts:
   {"fileName":"/Users/name/projects/web/src/bin.ts","pollingInterval":250}
 /users/name/projects/web/node_modules/@types/yargs/index.d.ts:
-  {"fileName":"/users/name/projects/web/node_modules/@types/yargs/index.d.ts","pollingInterval":250}
+  {"fileName":"/Users/name/projects/web/node_modules/@types/yargs/index.d.ts","pollingInterval":250}
 /a/lib/lib.d.ts:
   {"fileName":"/a/lib/lib.d.ts","pollingInterval":250}
 /users/name/projects/web/node_modules/@types/yargs/package.json: