If you get this error
Unrecognized or legacy configuration settings found
while running Yarn 2 or Yarn 3 it's possibly because you have a rogue environment variable YARN_XXXX in your environment
In my case, it was a YARN_WORKSPACES environment variable I accidentally created while using the Netlify BaaS that I was supposed to create with NETLIFY_YARN_WORKSPACES
Delete the rogue environment variable (in this case from Netlify's Build GUI but in other cases could be from your Dockerfile or CI/CD pipeline) and your problem will disappear
Basically yarn is a busybody and if it sees YARN_XXXXXX in your environment, it will complain if it doesn't recognise the environment variable and fail your build
I discovered this by modifying the build command to use yarn config -v to see the list of errors and it was an undocumented yarn error code
See https://yarnpkg.com/advanced/error-codes#yn0050---deprecated_cli_settings for another Netlify configuration error
Hope this helps someone!