@mjbvz I tested this today and seems that #84667 broke this again.
I tested both PRs separately and they fix both issues (#84197 and #83165) so you need to revert one of them.
The issue is that URI.parse is called twice here and here
#84667 fixes it by encoding the uri twice in the extension so a filename #.png will be encoded as "vscode-resource://file///home/jeanpierre/Desktop/vstest/%2523.png?version=1574091136161" (notice %23 is encoded as %2523)
This PR fixes just by encoding the path again before calling URI.parse the second time
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