Out of memory: Cannot allocate Wasm memory for new instance (after update from 1.100.3 to 1.101)

[JP95Git]

Does this issue occur when all extensions are disabled?: Yes

• VS Code Version: 1.101
• OS Version: Windows 11

Steps to Reproduce:

1. Having a working vscode 1.100.3 with remote connection to a linux server - everything works, no errors
2. Let vscode update to 1.101 - no problem so far
3. Let vscode update the code on the remote server - you'll get the error as seen here: Out of memory: Cannot allocate Wasm memory for new instance vscode-remote-release#11027