Extension Fails to start using PowerShell 7 if Windows PowerShell module path is above the PS7 module path in $PSMODULEPATH

Start by reproducing the VS Code extension startup failure with the Windows PowerShell module path above the PowerShell 7 path in $PSMODULEPATH, using the versions and installation scenario in the issue. Determine the startup failure's cause and verify that the extension starts normally with that path ordering; no specific source file or test is identified.

Prerequisites

• I have written a descriptive issue title.
• I have searched all open and closed issues to ensure it has not already been reported.
• I have read the troubleshooting guide.
• I am sure this issue is with the extension itself and does not reproduce in a standalone PowerShell instance.
• I have verified that I am using the latest version of Visual Studio Code and the PowerShell extension.
• If this is a security issue, I have read the security issue reporting guidance.

Summary

Hi,

This is the second time when I face this situation.
Scenario: Fresh install of Visual Studio Code (VSC), then install PowerShell extension from Microsoft. Upon requesting to trust publisher, I press A (always trust) in the terminal window and then nothing happens. I leave it for 1-2h without nothing to happen and then force to stop it. Restarting VSC and Windows PowerShell (x64) is never loading, the bottom-right icon is spinning forever. Switching to Windows PowerShell (x86) is working. The first time when this happened was 2-3 years ago and I remember I've spent also lot of time trying to figure out how to fix this. I discovered the fix by mistake: Found a post about OneDrive somehow corrupting some PowerShell (psm/psd) files from Documents folder or someting. Running chkdsk from command propmt fixed the issue. But now this doesn't seems to have any effect. Any ideas what can I do?

Thanks,
Marius.

PowerShell Version

Name                           Value                                                                                                                   
----                           -----                                                                                                                   
PSVersion                      5.1.22621.4249                                                                                                          
PSEdition                      Desktop                                                                                                                 
PSCompatibleVersions           {1.0, 2.0, 3.0, 4.0...}                                                                                                 
BuildVersion                   10.0.22621.4249                                                                                                         
CLRVersion                     4.0.30319.42000                                                                                                         
WSManStackVersion              3.0                                                                                                                     
PSRemotingProtocolVersion      2.3                                                                                                                     
SerializationVersion           1.1.0.1                                                                                                                 

Name             : Windows PowerShell ISE Host
Version          : 5.1.22621.4249
InstanceId       : 64347789-db94-40f5-9118-5d2a0c2cc76b
UI               : System.Management.Automation.Internal.Host.InternalHostUserInterface
CurrentCulture   : en-US
CurrentUICulture : en-US
PrivateData      : Microsoft.PowerShell.Host.ISE.ISEOptions
DebuggerEnabled  : True
IsRunspacePushed : False
Runspace         : System.Management.Automation.Runspaces.LocalRunspace

Visual Studio Code Version

1.94.0

Extension Version

v2024.2.2

Steps to Reproduce

See Summary section

Visuals

No response

Logs

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