VS Code not selecting environment in .venv/ on open with Environments extension installed

On Mac OS with the Python & Python Environments extensions installed, VS Code is failing to automatically activate a virtual environment in the .venv/ folder of the project when opened via `code .` in the terminal, or via opening the folder via the UI.

Despite being present in the `Select Python Environment List`.

`.venv` is present in the Python-envs: Workspace Search Paths setting.

To reproduce:

```bash
➜ projects uv init pyenvtest
Initialized project `pyenvtest` at `/Users/nina/projects/pyenvtest`
➜ projects cd pyenvtest
➜ pyenvtest git:(main) ✗ uv venv
Using CPython 3.14.4 interpreter at: /opt/homebrew/opt/python@3.14/bin/python3.14
Creating virtual environment at: .venv
Activate with: source .venv/bin/activate
➜ pyenvtest git:(main) ✗ code .
```

Uninstalling the Python Environments extension fixes the issue, and the environment in `.venv/` is automatically selected when VS Code opens.