Blind to terminal output

[michalkoza-clearalphatech]

Type: Bug

Copilot runs some terminal commands, to which I can see the output in the terminal, but copilot keeps saying there is no output and continuing with some useless reasoning based on that. It happens quite often but I have no idea how to reproduce it deterministically

Extension version: 0.37.9
VS Code version: Code 1.109.5 (Universal) (0725862, 2026-02-19T19:43:32.382Z)
OS version: Darwin arm64 25.3.0

[vs-code-engineering]

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[michalkoza-clearalphatech]

It still happens on 1.111.0
Steps to reproduce:

1. ask copilot to execute some terminal command e.g. pwd
2. it succeeds

Tool: run_in_terminal
Status: success

[Arguments]
{
  "command": "pwd",
  "explanation": "Check the current working directory",
  "goal": "Check pwd",
  "isBackground": false,
  "timeout": 5000
}

[Output]
Note: The tool simplified the command to ` pwd`, and this is the output of running that command instead:
/Users/michal.koza/repa/loop/context
                                                                                                                                                                                                          

3. There appeared something like "hidden terminal":

4. I click the hidden terminal (because I want to e.g. activate venv)
5. I ask copilot to run another terminal command:
6. It fails:

Tool: run_in_terminal
Status: success

[Arguments]
{
  "command": "ls -la",
  "explanation": "List files in the current directory",
  "goal": "List files",
  "isBackground": false,
  "timeout": 5000
}

[Output]
Note: The tool simplified the command to ` ls -la`, and this is the output of running that command instead:
~/r/l/context ❯❯❯                                          basedpyright_fixes ✭
                                                                                

Reasoning prompt says "The output is empty or truncated. Let me try again with a different approach."