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VS Code agent cannot capture terminal output in WSL workspace #13335

Description

@peterlithner

Environment
Windows with WSL2 (Ubuntu)
VS Code opened from a WSL directory using code .
Continue VS Code extension installed under both Local and WSL: Ubuntu
Continue version: 2.0.0
VS Code version: 1.140.0

Problem
When Continue’s agent runs a terminal command in the WSL workspace, the command text appears in the VS Code Ubuntu terminal. However, Continue receives neither the command’s output nor its exit status. The tool instead returns: "Command executed in remote terminal. Output capture is not yet available for remote environments"

This happens even with a harmless command such as pwd. The same command works when I run it myself in the Ubuntu terminal. In a local Windows workspace, Continue runs commands with output visible to the agent, so the failure appears specific to the remote-workspace execution path.

Steps to reproduce
On Windows, open a WSL2 Ubuntu workspace in VS Code by running code . from an Ubuntu directory.
Ask Continue in Agent mode to run pwd.
Observe that the command text is sent to an interactive Ubuntu terminal.
Observe that Continue receives the “Output capture is not yet available” message instead of the path or an exit status.

Expected behavior
Continue should execute the command in the WSL environment and return stdout, stderr, and exit status to the agent, as it does for local workspaces. It should not insert agent commands into a terminal containing unfinished user input.

Actual behavior and impact
The agent cannot determine whether a command ran or succeeded. This prevents it from reliably running tests, diagnosing build failures, or safely performing actions that require verification.

Related issues and PRs
#9731 — Terminal output not captured when Windows VS Code connects to WSL: Appears to describe this same VS Code extension behavior. It is closed, but the behavior remains reproducible.
#9679 — Use ide.runCommand when Windows host connects to WSL: Fixed a powershell.exe ENOENT error by routing commands through the VS Code terminal. That allows command text to reach WSL but does not provide output capture.
#9810 — Detect WSL and spawn appropriate shell: Changes the standalone CLI implementation, not the VS Code extension’s remote terminal output path. Its closure of #9731 does not appear to resolve this reproduction.

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