If Connecting to MSGraph then connecting to ExchangeOnline, error OperationStopped: Could not load file or assembly 'Microsoft.Identity.Client, Version=4.44.0.0.

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

I get the following error when trying to Connect-ExchangeOnline after doing a Connect-MgGraph. This Only happens in the Powershell Extension, I'm able to use this with pwsh.exe directly or MS Terminal without the error:

OperationStopped: Could not load file or assembly 'Microsoft.Identity.Client, Version=4.44.0.0, Culture=neutral, PublicKeyToken='.

PowerShell Version

Name                           Value
----                           -----
PSVersion                      7.4.2
PSEdition                      Core
GitCommitId                    7.4.2
OS                             Microsoft Windows 10.0.22621
Platform                       Win32NT
PSCompatibleVersions           {1.0, 2.0, 3.0, 4.0…}
PSRemotingProtocolVersion      2.3
SerializationVersion           1.1.0.1
WSManStackVersion              3.0

Name             : Visual Studio Code Host
Version          : 2024.2.1
InstanceId       : be24d740-2125-4bf7-aa9b-5633feaa8977
UI               : System.Management.Automation.Internal.Host.InternalHostUserInterface
CurrentCulture   : en-US
CurrentUICulture : en-US
PrivateData      : Microsoft.PowerShell.ConsoleHost+ConsoleColorProxy
DebuggerEnabled  : True
IsRunspacePushed : False
Runspace         : System.Management.Automation.Runspaces.LocalRunspace

Visual Studio Code Version

1.88.1
e170252f762678dec6ca2cc69aba1570769a5d39
x64

Extension Version

adamwojcikit.pnp-powershell-extension@2.12.21
ms-vscode.powershell@2024.2.1
tobysmith568.run-in-powershell@1.2.0

Steps to Reproduce

Connect-MgGraph -Scopes 'User.Read.All'
Connect-ExchangeOnline

Visuals

20240426-PSError-ConnectExchangeOnline-stepsrecording.zip

Logs

No response

Start by reproducing the reported sequence in the PowerShell extension: run Connect-MgGraph -Scopes 'User.Read.All', then Connect-ExchangeOnline, and compare it with pwsh.exe or Microsoft Terminal. Investigate the extension's PowerShell runspace and assembly-loading behavior; done means both commands complete successfully in VS Code without the Microsoft.Identity.Client error.