This looks like more a bug in the terminal API side of things. I can repro this as well using vscode.window.createTerminal from an extension (which is the API that debug also uses internally).

Nevermind, I missed the permission banner in the corner. Could be related #109111

I don't quite understand the issue...

But may be the following FYIs help:

• Debug Console doesn't respect user settings. #109111 and [Debug] Launch In Terminal still goes to the previous terminal window after i change the default shell #81345 are fixed in the next Insiders
• VS Code has specific settings ("automationShell") for configuring the integrated terminal that is used for debug and tasks: e.g. "terminal.integrated.automationShell.windows".

I poked at it a little bit. I thought it wasn't pulling the workspace, and pinged Daniel about it

He said:

It should be getting set still:

vscode/src/vs/workbench/api/node/extHostTerminalService.ts

Lines 238 to 240 in af6843b

	public $acceptWorkspacePermissionsChanged(isAllowed: boolean): void {
	this._isWorkspaceShellAllowed = isAllowed;
	}

Not sure if the todo is valid anymore but I think it was around setting the initial state and maybe pulling it from main instead of pushing

I haven't looked at it again since

This seems to work now after clicking the "allow workspace shell" prompt.

Verification:

1. Set your global shell to something, like git bash
2. Set your workspace shell to something else, like powershell
3. Use a launch config like this and F5:

{
  "type": "node",
  "request": "launch",
  "console": "integratedTerminal",
  "name": "[Node] Launch program",
  "program": "${workspaceFolder}/main.js",
},

4. You will probably get the workspace shell prompt and it'll launch in the global terminal the first time. After you allow the workspace to modify your shell, it'll launch in the workspace shell correctly.

@connor4312 It looks like default shell settings are no longer respected at all in workspace settings. I've verified that the original behavior in the bug occurs still. Seems like this is probably by design.

Yea it looks like the new profiles are only applied on a per-user basis. So this would now be as designed.