The issue arises due to default CORS settings in Nuxt, allowing any website to send requests to the development server and read the response. This can lead to source code theft by malicious websites, especially for users with the default `server.cors` option using Vite builder. The vulnerability can be exploited even if the development server is only accessible locally and not exposed to the network. There are three main causes: permissive default CORS settings, lack of validation on the Origin header for WebSocket connections, and lack of validation on the Host header for HTTP requests. These can allow attackers to steal source code, access functionalities not meant to be exposed, and exploit certain plugin functionalities.