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This repros on stable and I think this is happening when you are on dark mode in the OS and your VS Code theme is set to light. See here as I toggle the OS theme (notice how Finder updates):
It appears that this expected behavior but it's a problem because we don't update the title bar based on the OS title bar. Up to you if you want to re-open.
This seems like a bug where something changed, dark themes are fine but the light themes makes the controls hard to see:
Dark
Light
Others
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