@joaomoreno on macOS running the following from a terminal
open vscode-insiders://andreweinand.protocol-handler/foo
opens VS Code and shows the redirecting alert.
But after pressing "Yes" the handler isn't called because VS Code was launched without the --enable-proposed-api flag.

Interesting, I didn't see it happening for me. I'll investigate more...

Same behavior on Windows for me

This was a cute issue. The protocol handler would register while the user was being prompted whether he wants to let the extension handle the URI. It would then get lost after confirmation.

Steps:

1. Run code-insiders --open-url vscode-insiders://vscode.git/clone?url=git%40github.com%3AMicrosoft%2Fvscode-vsce.git

You should be prompted as to whether you'd want to let the git extension handle the URL. If accepted, the clone action should take place.