Please use

• Latest VS Code Insiders
• Custom branch of Jupyter extension (se below)
  PR in Jupyter extension Remove all awaits when updating cell outputs vscode-jupyter#7100
  • Use the VSIX generated in the above PR (one of the assets in the CI is the Jupyter VSIX)
  • Or use the corresponding branch of the above PR

Please note:
As we're no longer awaiting on the promises, any errors thrown will be ignored completely.
We don't even await on <Execution Task>.end

Steps to repro
Create first cell with the following code:

from IPython.display import Markdown
dh = display(display_id=True)

Run the above cell, then run the following cell:

dh.update(Markdown("foo"))

After you run the second cell, the first cell should have an output foo.
Collapse the first cell & expand it, and you'll see foo appear, basically its a refresh issue.