start a vanilla project using the typescript template
open any file. you'll see an error like this this:

try to edit the tsconfig.json

but CRA overwrites the file every time it starts. Many bug reports on this ducking behavior
etc.
yes
wtf does cra overwrite my tsconfig.json
Cannot use JSX unless the '--jsx' flag is provided.",
➜ tadmin git:(tadmin) ✗ npx create-react-app --info
npx: installed 67 in 4.641s
Environment Info:
current version of create-react-app: 4.0.1
running from /Users/dc/.npm/_npx/17244/lib/node_modules/create-react-app
System:
OS: macOS 10.15.7
CPU: (4) x64 Intel(R) Core(TM) i5-6267U CPU @ 2.90GHz
Binaries:
Node: 14.5.0 - /usr/local/bin/node
Yarn: 1.17.3 - /usr/local/bin/yarn
npm: 6.14.9 - /usr/local/bin/npm
Browsers:
Chrome: 86.0.4240.198
Edge: Not Found
Firefox: Not Found
Safari: 14.0.1
npmPackages:
react: ^17.0.1 => 17.0.1
react-dom: ^17.0.1 => 17.0.1
react-scripts: 4.0.1 => 4.0.1
npmGlobalPackages:
create-react-app: Not Found
1 $ npx create-react-app my-app --template typescript
2 open vscode editor.
can use typescript with CRA
FFS

try with your own template
the --jsx bug is all over too
https://stackoverflow.com/questions/50432556/cannot-use-jsx-unless-the-jsx-flag-is-provided
I guess craco isn't working with CRA4 (yet?)
so the only way to use TS with CRA(4) seems to be to eject right now.
This is because VS Code the app hasn't updated to typescript v4.1 yet which has support for the new jsx transform. To fix this you need to tell VS Code to use the Workspace version of typescript (v4.1.2).
To fix this, while viewing a TS file, bring up the command pallet (cmd+shift+p) and type "select typescript version", select the option and then select "Use Workspace Version 4.1.2".
Side note, while CRA creates a package.json with "typescript": "^4.0.3", the actual installed version in node_modules is 4.1.2 (this should be fix by CRA as 4.0.3 is not compatible). So it probably makes sense to also update the typescript version in package.json.
For me, it works after upgrading to "react-scripts": "^4.0.1":
"react-scripts": "^4.0.1",
"typescript": "^4.1.2"
This is an editor issue, and not specific to CRA from what i can tell. If you receive errors in npm start or npm run build, then you know you have an issue with CRA. The suggestion from https://github.com/facebook/create-react-app/issues/10144#issuecomment-733278351 should get you on the right path.
Most helpful comment
This is because VS Code the app hasn't updated to typescript v4.1 yet which has support for the new jsx transform. To fix this you need to tell VS Code to use the Workspace version of typescript (v4.1.2).
To fix this, while viewing a TS file, bring up the command pallet (cmd+shift+p) and type "select typescript version", select the option and then select "Use Workspace Version 4.1.2".
Side note, while CRA creates a
package.jsonwith"typescript": "^4.0.3", the actual installed version innode_modulesis 4.1.2 (this should be fix by CRA as 4.0.3 is not compatible). So it probably makes sense to also update the typescript version inpackage.json.