`code serve-web` ignores the `--enable-proposed-api` flag

Does this issue occur when all extensions are disabled?: N/A, this requires an extension with proposed APIs enable to occur.

• VS Code Version: code 1.93.1 (commit 38c31bc77e0dd6ae88a4e9cc93428cc27a56ba40)
• OS Version: Debian 11

Steps to Reproduce:

1. Create an extension that declares enabledApiProposals in its package.json file, e.g.:

<...>
"name": "myextension",
"publisher": "publisher",
"enabledApiProposals": [
    "chatParticipantPrivate"
],
<...>

2. Launch serve-web with the --enable-proposed-api option enabling proposed APIs for your extension:

code --enable-proposed-api="publisher.myextension" \
  serve-web \
  --port "11001" \
  --host "0.0.0.0" \
  --without-connection-token \
  --accept-server-license-terms

3. Observe developer tools console:
   • Expected: The extension is allowed to call into the proposed API.
   • Actual:

mainThreadExtensionService.ts:107 Activating extension 'publisher.myextension' failed: Extension 'publisher.myextension' CANNOT use API proposal: chatParticipantPrivate.
Its package.json#enabledApiProposals-property declares:  but NOT chatParticipantPrivate.
The missing proposal MUST be added and you must start in extension development mode or use the following command line switch: --enable-proposed-api publisher.myextension.

The flag does work if code is launched locally and serve-web is not invoked. However the web IDE enabled by serve-web ignores the flag.