Deploy netlify-builder preset via netlify cli

[ol1s]

Does this look correct - I'm building my app with:

nitro: {
  preset: "netlify-builder"
}

This builds the following file tree:

.netlify/
  functions-internal/
    server/
    nitro.json
dist/
  _nuxt/
  _headers
  _redirects

I am deploying to netlify cli using:

netlify deploy
  --auth $NETLIFY_AUTH_TOKEN
  --site $NETLIFY_SITE_ID
  --dir dist/
  --functions .netlify/functions-internal/

I'm getting 500 response when previewing my deployed app - but I don't know whether I've simply configured it wrongly?