Always turning off applyAtShellIntegration option seem to resolve the issue. (So only applying things ONLY at the process creation resolves the issue, whereas before sometimes both were enabled as true which seemed to lead to repro of the behavior)

                        const options = {                            applyAtShellIntegration: false,                            applyAtProcessCreation: true,                        };

but this is concerning, given that we had to switch to this "double prepend" for some reasons in the past.

Reference:#22905 (double prepend) instead of#21906 (for prepending)

Potential cause:

1. It could be a problem with applyAtShellIntegration itself
2. It could be problem with the fact that we are applying at BOTH applyAtShellIntegration AND applyAtProcessCreation.
3. VSCODE_CWD and PWD is wrongly set from core, and in the process of implicitly activate user's environment (via terminal env var experiment setting each individual user's environment variable, we wrongly cache and set this not-intended to be saved/cached VSCODE_CWD and PWD
   and
   

Fix: Avoid setting PWD when in Terminal Env Var experiment.

⚠️ This PR originates from a fork. Due to security restrictions, pipelines from forks are no longer triggered automatically.Learn more.

If the changes appear safe, you can manually trigger the pipeline by commenting/AzurePipelines run.