I used @joshbaeha's suggestion to ng new a new Angular 5 project and copied the test.ts file, which appears to be completely generic and not reliant on project structure or anything else. Everything is now working. Here it is:

test.ts

// This file is required by karma.conf.js and loads recursively all the .spec and framework files

import 'zone.js/dist/zone-testing';
import { getTestBed } from '@angular/core/testing';
import {
  BrowserDynamicTestingModule,
  platformBrowserDynamicTesting
} from '@angular/platform-browser-dynamic/testing';

declare const require: any;

// First, initialize the Angular testing environment.
getTestBed().initTestEnvironment(
  BrowserDynamicTestingModule,
  platformBrowserDynamicTesting()
);
// Then we find all the tests.
const context = require.context('./', true, /\.spec\.ts$/);
// And load the modules.
context.keys().map(context);

The error was in karma.conf.js file as the path to test.ts was pointing to src folder which is wrong.:

...
files: [
    { pattern: './src/test.ts', watched: false }
],
preprocessors: {
    './src/test.ts': ['@angular/cli']
}
..., 

Solution: I had remove the file test.ts from root to /src folder: /src/test.ts and it runs the command as expected.

05-09-2020

Angular 10

My issue was an invalid case of the component path due to copy/paste error :D

Wrong:

import { RegisterComponent } from './Register/Register.component';

Correct:

import { RegisterComponent } from './register/register.component';

Simple solution: just remove the call to require.context

I just faced the same problem, converting an app from Angular 14 to 15, and it turns out the solution is even simpler: just delete the two lines at the bottom of src/test.ts. The call to require.context() is no longer needed.

I used to have

const context = require.context("./", true, /\.spec\.ts$/);
context.keys().forEach(context);

at the end of src/test.ts, but now I have deleted those two lines and all my tests run just like they used to with Angular 14.

I could not find proper documentation for this change (that's why I landed on this question in the first place) but my assumption is that Karma now automatically finds all the *.spec.ts files and we no longer need to direct it to do so.

Narrowing the test suites with "include"

The "include" property, added under "test":/"options":, can be used to restrict the list of spec files to run.

According to my tests, configuring angular.json like this:

   "test": {
     "options": {
        "include": ["**/*.spec.ts"],
        ...
     },
     ...

is the same as without "include": all spec files are exercised.

But configuring angular.json like this:

   "test": {
     "options": {
        "include": ["**/app.component.spec.ts"],
        ...
     },
     ...

would only run spec files called app.component.spec.ts.