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vscode freezes or crashes when opening a large folder

snap vscode 1.100.2, Ubuntu 25.04

The issue appears to be that the file watcher goes out of control.

The reproduction is very simple:

mkdir mytest
cd mytest
seq 1000000 | xargs touch
code --disable-extensions .

and now the editor GUI hangs and Ubuntu shows a popup:

The window is not responding

htop reveals a bunch of processes or threads of type:

/snap/code/194/usr/share/code/code

Infinite duplicate pool:

 Ancestors (8)