[WebToolsE2E][v11] Creating a Razor Page in ASP.NET Core project causes NETSDK1022 Duplicate 'Content' items error

REGRESSION INFO: Not Repro on V3 Stable: CDK: 3.40.201; C#: 2.151.28
INSTALL STEPS

1. OS: Windows x64
2. Install the SDK 10.0.401
3. Install VS Code insiders - 1.139.0
4. Install C#DevKit (public prerelease): 11.0.2 (C#: 2.151.28)

REPRO STEPS

1. Open VS Code. > Click "Create .NET Project" > ASP.NET Core Empty
2. create folder named Pages > Right-click the Pages folder > Select New .NET File...
3. Select Razor Page > Keep the default name Index1 > Enter
4. Start new instance

Workaround:
Include this on xx.csproj inside <PropertyGroup>
<EnableDefaultContentItems>false</EnableDefaultContentItems>

ACTUAL After creating a Razor Page (Index1) under the Pages folder, project detection fails with NETSDK1022: Duplicate 'Content' items were included. Project cannot run.

Logs:
Duplicate 'Content' items were included. The .NET SDK includes 'Content' items from your project directory by default. You can either remove these items from your project file, or set the 'EnableDefaultContentItems' property to 'false' if you want to explicitly include them in your project file. For more information, see https://aka.ms/sdkimplicititems. The duplicate items were: 'Pages\Hero.cshtml' [C:\Users\v-cimperial\WebApplication3\WebApplication3\WebApplication3.csproj]

EXPECTED The Razor Page should be created successfully with no errors, and the project should run successfully.