Updating workspace via VS Code fails

Here are the logs from the Coder VS Code output panel when I try to update my workspace via the "Update workspace" button in VS Code:

```
2026-08-25 13:49:18.543 [info] [session 3c5e933a] Updating kevin/workstation {"status":"running"}
2026-08-25 13:49:20.446 [info] [session 3c5e933a] Workspace kevin/workstation state changed {"from":"running","to":"stopping","transition":"stop","reason":"initiator"}
2026-08-25 13:49:20.446 [info] [session 3c5e933a] Workspace kevin/workstation agent removed
2026-08-25 13:49:35.695 [info] [session 3c5e933a] Workspace kevin/workstation state changed {"from":"stopping","to":"stopped","transition":"stop","reason":"initiator"}
2026-08-25 13:49:41.967 [info] [session 3c5e933a] Workspace kevin/workstation state changed {"from":"stopped","to":"starting","transition":"start","reason":"ssh_connection"}
2026-08-25 13:49:49.480 [warning] [session 3c5e933a] Update failed for kevin/workstation: "--global-config /Users/kevin/Library/Application Support/Code/User/globalStorage/coder.coder-remote/coder.stackav.io update kevin/workstation" exited with code 1: Encountered an error running "coder update", see "coder update --help" for more information
error: Trace=[start workspace: create workspace build: ]
A workspace build is already active.
A workspace build is already active.
```

The workspace does restart but ends up still running the same (non-updated) template version. Updating the workspace on the Coder website works fine as a workaround.

This is on macOS using the Coder VS Code extension version 1.16.1 in VS Code version 1.134.0 (Universal). We're running Coder v2.35.3 on the server.

I found https://github.com/coder/vscode-coder/issues/972 but I'm not sure if it's the same issue. The workspace template I am using does use dynamic parameters with one of the mentioned conditions (`A parameter only appears for certain combinations of other inputs (the static rich-parameters list does not include it).`).