For local dev you need to install ncc bundler tool:
install npm i -g @vercel/ncc
Then after making any changes, you need to run the following command before pushing:
ncc build index.js
This will combine your code + all the dependencies in node_modules into a single .js file in the dist dir.
Its important to have a single file otherwise the action may not work correctly (per official github docs on custom JS actions).