Terminals created by Copilot extension not activated with Python Environment

[DonJayamanne]

Originally reported here #25323
@Windsage63 FYI, created this issue based on your feedback in another issue.

[Windsage63]

I opened up VS Code Insiders as normal. I opened a new terminal myself and got the following:

PS D:\PythonProjects\AISightStudio> & D:\PythonProjects\AISightStudio.venv\Scripts\Activate.ps1
(.venv) PS D:\PythonProjects\AISightStudio> python -c "import sys; print(sys.executable)"
D:\PythonProjects\AISightStudio.venv\Scripts\python.exe
(.venv) PS D:\PythonProjects\AISightStudio>

Without doing anything else I put the following prompt into the agent GPT-4.1:
Please open a new terminal and issue the following command: python -c "import sys; print(sys.executable)"

Ad got this:

PS D:\PythonProjects\AISightStudio> python -c "import sys; print(sys.executable)"
C:\Users\tmall\AppData\Local\Programs\Python\Python313\python.exe
PS D:\PythonProjects\AISightStudio>

Here is the entire output:

2025-07-24 17:10:02.053 [warning] [Window] Via 'product.json#extensionEnabledApiProposals' extension 'ms-vsliveshare.vsliveshare' wants API proposal 'notebookCellExecutionState' but that proposal DOES NOT EXIST. Likely, the proposal has been finalized (check 'vscode.d.ts') or was abandoned.
2025-07-24 17:10:02.063 [warning] [Window] Via 'product.json#extensionEnabledApiProposals' extension 'ms-python.gather' wants API proposal 'notebookCellExecutionState' but that proposal DOES NOT EXIST. Likely, the proposal has been finalized (check 'vscode.d.ts') or was abandoned.
2025-07-24 17:10:02.063 [warning] [Window] Via 'product.json#extensionEnabledApiProposals' extension 'ms-python.vscode-pylance' wants API proposal 'mcpConfigurationProvider' but that proposal DOES NOT EXIST. Likely, the proposal has been finalized (check 'vscode.d.ts') or was abandoned.
2025-07-24 17:10:02.373 [info] [Window] Started local extension host with pid 22048.
2025-07-24 17:10:02.989 [info] [Cloud Changes] Prompting to enable cloud changes, has application previously launched from Continue On flow: false
2025-07-24 17:10:03.061 [info] [Window] Settings Sync: Account status changed from uninitialized to unavailable
2025-07-24 17:10:04.935 [error] [Window] [Extension Host] (node:22048) ExperimentalWarning: SQLite is an experimental feature and might change at any time
(Use Code - Insiders --trace-warnings ... to show where the warning was created)
2025-07-24 17:10:05.182 [info] [Window] [perf] Render performance baseline is 10ms
2025-07-24 17:10:07.749 [error] [Network] microsoft/vscode#33: https://api.github.com/copilot_internal/user - error GET Canceled
2025-07-24 17:10:09.165 [error] [Window] [UriError]: Scheme contains illegal characters.: Error: [UriError]: Scheme contains illegal characters.
at R7 (file:///D:/Microsoft%20VS%20Code%20Insiders/resources/app/out/main.js:30:63994)
at new id (file:///D:/Microsoft%20VS%20Code%20Insiders/resources/app/out/main.js:30:67374)
at new jr (file:///D:/Microsoft%20VS%20Code%20Insiders/resources/app/out/main.js:30:68812)
at id.revive (file:///D:/Microsoft%20VS%20Code%20Insiders/resources/app/out/main.js:30:68589)
at G4.call (file:///D:/Microsoft%20VS%20Code%20Insiders/resources/app/out/main.js:85:104771)
at Df.s (file:///D:/Microsoft%20VS%20Code%20Insiders/resources/app/out/main.js:31:14859)
at Df.q (file:///D:/Microsoft%20VS%20Code%20Insiders/resources/app/out/main.js:31:14382)
at Yo.value (file:///D:/Microsoft%20VS%20Code%20Insiders/resources/app/out/main.js:31:13784)
at D.C (file:///D:/Microsoft%20VS%20Code%20Insiders/resources/app/out/main.js:30:2373)
at D (file:///D:/Microsoft%20VS%20Code%20Insiders/resources/app/out/main.js:30:2443)
at D.fire (file:///D:/Microsoft%20VS%20Code%20Insiders/resources/app/out/main.js:30:2660)
at Yo.value (file:///D:/Microsoft%20VS%20Code%20Insiders/resources/app/out/main.js:28:4827)
at D.C (file:///D:/Microsoft%20VS%20Code%20Insiders/resources/app/out/main.js:30:2373)
at D.fire (file:///D:/Microsoft%20VS%20Code%20Insiders/resources/app/out/main.js:30:2591)
at Yo.value (file:///D:/Microsoft%20VS%20Code%20Insiders/resources/app/out/main.js:28:5015)
at D.C (file:///D:/Microsoft%20VS%20Code%20Insiders/resources/app/out/main.js:30:2373)
at D.fire (file:///D:/Microsoft%20VS%20Code%20Insiders/resources/app/out/main.js:30:2591)
at z (file:///D:/Microsoft%20VS%20Code%20Insiders/resources/app/out/main.js:28:7309)
at IpcMainImpl.i (file:///D:/Microsoft%20VS%20Code%20Insiders/resources/app/out/main.js:33:21024)
at IpcMainImpl.emit (node:events:518:28)
at Session. (node:electron/js2c/browser_init:2:106370)
at Session.emit (node:events:518:28)

Now If I open a terminal and enter the venv manually and then open VS Code from that terminal using:

cd D:\PythonProjects\AISightStudio ; ..venv\Scripts\Activate.ps1 ; code-insiders

That same prompt results in this:

PS D:\PythonProjects\AISightStudio> python -c "import sys; print(sys.executable)"
D:\PythonProjects\AISightStudio.venv\Scripts\python.exe
PS D:\PythonProjects\AISightStudio>

And the output still reads:

2025-07-24 17:16:48.367 [warning] [Window] Via 'product.json#extensionEnabledApiProposals' extension 'ms-vsliveshare.vsliveshare' wants API proposal 'notebookCellExecutionState' but that proposal DOES NOT EXIST. Likely, the proposal has been finalized (check 'vscode.d.ts') or was abandoned.
2025-07-24 17:16:48.377 [warning] [Window] Via 'product.json#extensionEnabledApiProposals' extension 'ms-python.gather' wants API proposal 'notebookCellExecutionState' but that proposal DOES NOT EXIST. Likely, the proposal has been finalized (check 'vscode.d.ts') or was abandoned.
2025-07-24 17:16:48.377 [warning] [Window] Via 'product.json#extensionEnabledApiProposals' extension 'ms-python.vscode-pylance' wants API proposal 'mcpConfigurationProvider' but that proposal DOES NOT EXIST. Likely, the proposal has been finalized (check 'vscode.d.ts') or was abandoned.
2025-07-24 17:16:48.693 [info] [Window] Started local extension host with pid 34308.
2025-07-24 17:16:49.340 [error] [Window] [Extension Host] (node:34308) ExperimentalWarning: SQLite is an experimental feature and might change at any time
(Use Code - Insiders --trace-warnings ... to show where the warning was created)
2025-07-24 17:16:49.492 [info] [Window] Settings Sync: Account status changed from uninitialized to unavailable
2025-07-24 17:16:49.628 [info] [Cloud Changes] Prompting to enable cloud changes, has application previously launched from Continue On flow: false
2025-07-24 17:16:51.242 [error] [Network] microsoft/vscode#5: https://api.github.com/copilot_internal/user - error GET Canceled
2025-07-24 17:16:51.258 [info] [Window] [perf] Render performance baseline is 10ms
2025-07-24 17:16:52.123 [error] [Window] [UriError]: Scheme contains illegal characters.: Error: [UriError]: Scheme contains illegal characters.
at R7 (file:///D:/Microsoft%20VS%20Code%20Insiders/resources/app/out/main.js:30:63994)
at new id (file:///D:/Microsoft%20VS%20Code%20Insiders/resources/app/out/main.js:30:67374)
at new jr (file:///D:/Microsoft%20VS%20Code%20Insiders/resources/app/out/main.js:30:68812)
at id.revive (file:///D:/Microsoft%20VS%20Code%20Insiders/resources/app/out/main.js:30:68589)
at G4.call (file:///D:/Microsoft%20VS%20Code%20Insiders/resources/app/out/main.js:85:104771)
at Df.s (file:///D:/Microsoft%20VS%20Code%20Insiders/resources/app/out/main.js:31:14859)
at Df.q (file:///D:/Microsoft%20VS%20Code%20Insiders/resources/app/out/main.js:31:14382)
at Yo.value (file:///D:/Microsoft%20VS%20Code%20Insiders/resources/app/out/main.js:31:13784)
at D.C (file:///D:/Microsoft%20VS%20Code%20Insiders/resources/app/out/main.js:30:2373)
at D (file:///D:/Microsoft%20VS%20Code%20Insiders/resources/app/out/main.js:30:2443)
at D.fire (file:///D:/Microsoft%20VS%20Code%20Insiders/resources/app/out/main.js:30:2660)
at Yo.value (file:///D:/Microsoft%20VS%20Code%20Insiders/resources/app/out/main.js:28:4827)
at D.C (file:///D:/Microsoft%20VS%20Code%20Insiders/resources/app/out/main.js:30:2373)
at D.fire (file:///D:/Microsoft%20VS%20Code%20Insiders/resources/app/out/main.js:30:2591)
at Yo.value (file:///D:/Microsoft%20VS%20Code%20Insiders/resources/app/out/main.js:28:5015)
at D.C (file:///D:/Microsoft%20VS%20Code%20Insiders/resources/app/out/main.js:30:2373)
at D.fire (file:///D:/Microsoft%20VS%20Code%20Insiders/resources/app/out/main.js:30:2591)
at z (file:///D:/Microsoft%20VS%20Code%20Insiders/resources/app/out/main.js:28:7309)
at IpcMainImpl.i (file:///D:/Microsoft%20VS%20Code%20Insiders/resources/app/out/main.js:33:21024)
at IpcMainImpl.emit (node:events:518:28)
at Session. (node:electron/js2c/browser_init:2:106370)
at Session.emit (node:events:518:28)

[Tyriar]

I hear this a lot from internal users FYI.

[Windsage63]

I do not know what this issue was, but it has gone away. I also notice that now when I or the agent open a new terminal, the (.venv) is there at the beginning of the line, and that a terminal opened by the copilot agent is no longer labeled as copilot (with a little copilot symbol) in the list of terminals. Obviously some code was changed internally.

[anthonykim1]

I think this is becoming more surfaced up as we turned off implicit activation (python terminal env var experiment which was 100%), and starting default to command activation where commands have to be sent in the terminal to activate.

Can people try shell startup activation
setting from https://marketplace.visualstudio.com/items?itemName=ms-python.vscode-python-envs

Here is what I found:
With terminal env experiment we used to have as default we'd get -> activated copilot terminal:

venvAgent.mov

Without terminal env experiment (so command activation), also without Python env var extension -> not activated copilot terminal:

noEnvYCAgent.mov

Without terminal env experiment (so command activation), With Python env var extension -> not activated copilot terminal:

envAgent.mov