Mouse pointer flickers/disappears and selection/copy hangs in plain PowerShell

Windows Terminal version

1.24.11911.0 (Stable); 1.25.1912.0 (Preview)

Windows build number

Windows 11 Pro 25H2, 10.0.26200.9168

Other Software

• Plain Windows PowerShell 5.1 (no WSL, SSH, Codex, Claude Code, vim, or other TUI)
• NVIDIA GeForce RTX 5070 Ti, driver 610.88
• Intel integrated GPU
• ToDesk Virtual Display Adapter
• Multiple monitors with mixed 180 Hz / 60 Hz refresh rates and landscape / portrait orientations
• ToDesk, Wallpaper Engine, and Armoury Crate are installed/running

Steps to reproduce

1. Open Windows Terminal Stable or Windows Terminal Preview.
2. Start a fresh plain Windows PowerShell tab.
3. Move the mouse pointer from outside the window into the terminal content area.
4. Move the pointer around or drag across text to select it.
5. Try to copy the selection.

The problem reproduces immediately after starting Terminal and after a reboot. No terminal application or TUI is required.

Expected Behavior

The mouse pointer should remain visible and stable. Text selection and copy should complete normally without flickering, hanging, or losing the selection.

Actual Behavior

As soon as the mouse enters the terminal content area, the pointer starts flickering and intermittently disappears. Dragging to select text causes additional flashing; selection/copy can stop rendering or hang, and the copied content may not appear.

The issue reproduces in both Stable and Preview.

Additional observations:

• Terminal settings are close to defaults; Acrylic/transparency is not enabled.
• Windows clipboard APIs work normally outside Windows Terminal.
• There are no observed Terminal renderer crashes, GPU reset events, or DWM crashes.
• This does not appear to be the OSC 52 deadlock in #20467: the reproduction uses a fresh plain PowerShell tab and no application emits OSC 52.
• A 21-second screen recording is attached below.

https://github.com/user-attachments/assets/61015237-6fa8-4aaa-8a40-5e8b7f5ad7d5

https://github.com/user-attachments/assets/d6b5427d-151d-44b7-91b7-367d73ef65c5

No source file or test is named. First reproduce in Windows Terminal Stable or Preview with a fresh plain PowerShell tab, then compare the behavior with conhost.exe and the listed rendering, HAGS, and MPO configurations. Done means the pointer remains stable and text selection and copying complete normally in the reported setup.