Faced this issue after VSCode automatically updated to `1.104.0` (August 2025 release). In order to fix it, you'll have to disable automatic updates and rollback to `1.103.X` (July 2025 release):
- First, click on the bottom-right corner where it says "Opening remote".
- In the menu that opens, click "Close Remote Connection".
- Click on the Manage icon (⚙️) and select "Settings". If you didn't close the remote connection, the Settings page will open but nothing will load, you won't won't be able to change them.
- Search for "Update Mode" and change it to `"none"` or `"manual"` .
- Navigate to <https://code.visualstudio.com/updates/v1_103> and download the right version for your system.
- Install it.
If someone arrives to this answer later than August 2025, chances are the latest update broke it. The steps to fix it (by rolling back) is mostly the same:
- Go to "Help" \> "About".
- See your current version and if it was recently updated. If it was, changes are the latest update broke it.
- Follow the steps above and look for the version previous to the one you currently have.

Faced the same issue today after VSCode automatically updated to `1.104.0` (August 2025 release). In order to fix it, you'll have to disable automatic updates and rollback to `1.103.X` (July 2025 release):
- First, click on the bottom-right corner where it says "Opening remote".
- In the menu that opens, click "Close Remote Connection".
- Click on the Manage icon (⚙️) and select "Settings". If you didn't close the remote connection, the Settings page will open but nothing will load, you won't won't be able to change them.
- Search for "Update Mode" and change it to `"none"` or `"manual"` .
- Navigate to https://code.visualstudio.com/updates/v1_103 and download the right version for your system.
- Install it.
If someone arrives to this answer later than August 2025, chances are the latest update broke it. The steps to fix it (by rolling back) is mostly the same:
- Go to "Help" \> "About".
- See your current version and if it was recently updated. If it was, changes are the latest update broke it.
- Follow the steps above and look for the version previous to the one you currently have.