Error "Extensions have been modified on disk. Please reload the window." occurs randomly in 1.97.0-insider

[AdamWr]

Does this issue occur when all extensions are disabled?: No (but it looks like that it happens with few different extension)

• VS Code Version:
  Version: 1.97.0-insider (user setup)
  Commit: 70866d5
  Date: 2025-01-07T05:05:41.564Z
  Electron: 32.2.7
  ElectronBuildId: 10660205
  Chromium: 128.0.6613.186
  Node.js: 20.18.1
  V8: 12.8.374.38-electron.0
  OS: Windows_NT x64 10.0.26100
• OS Version: Windows 11

I'm not sure what exact steps to reproduce are, because it seems to occurs "randomly" and after some time error is not shown until I uninstall and then install extension again (though I'm not sure about reinstalling extension, maybe it occurs without that).
So these steps to reproduce might be not enough.

Steps to Reproduce:

1. Install VSCode - Insiders
2. Install few extensions:

• Docker - https://marketplace.visualstudio.com/items?itemName=ms-azuretools.vscode-docker
• Eslint - https://marketplace.visualstudio.com/items?itemName=dbaeumer.vscode-eslint
• GitHub Copilot - https://marketplace.visualstudio.com/items?itemName=GitHub.copilot

3. Create two folders:

• Test1 - initialize git
• Test2

4. Close VSCode
5. Open Test1 folder in VSCode
6. Open Test2 folder in VSCode
7. Repeat points 5-6 meantime uninstalling and installing again one of the extensions, for example Docker

At some point there will be an error Extensions have been modified on disk. Please reload the window..

Screenshot

Video was created in Windows Sandbox with default settings and with few (mentioned in the steps to reproduce) extensions installed and it occurs randomly.
But on my "main" PC I can reproduce it constantly when I open specific folder or connect to WSL with specific folder.

Video

2025-01-07.16-23-09.mp4

I cannot reproduce it with 1.96.2 version.

[omidshojaee]

Same here. Happens when

1. Open VS Code
2. Open any project from "Recent"

So it happens two times for me.

Version: 1.97.0-insider (user setup)
Commit: 70866d528727b9131fc07b0f14869f256059949b
Date: 2025-01-07T05:05:41.564Z
Electron: 32.2.7
ElectronBuildId: 10660205
Chromium: 128.0.6613.186
Node.js: 20.18.1
V8: 12.8.374.38-electron.0
OS: Windows_NT x64 10.0.26100

[AdamWr]

It seems that it has been fixed in new version:

Version: 1.97.0-insider
Commit: 9b0b13d9bfe21c3dfd227bfaa8ed5693e309a2e0
Date: 2025-01-08T05:06:32.681Z

or at least I cannot reproduce it anymore.