`ModuleNotFoundError` when debugging files in workspace subdirectory

Code Snippet

src/declare.py

def func():
    return "success"

src/consume.py

from declare import func

print(func())

Repro Steps

1. Create files as above. Note that they are in the src subdirectory of the workspace.
2. Open workspace root (parent of src) in https://insiders.vscode.dev/?vscode-coi=
3. Open consume.py
4. "Run Python File in WASM"
5. Note that "success" is printed in the program output (Terminal pane)
6. "Debug Python File in WASM"
7. When debugger stops at top of file, press the "Continue" button in the debugging toolbar.

Expected behavior

Code runs successfully again and prints "success" in the program output (Debug Console pane)

Actual behavior

No "success" in program output. "Debug Console" shows the errors below. I think the "Bad file descriptor" may be a known issue, but note the ModuleNotFoundError.

If you move the two files from src to the workpace root, the code works as expected while debugging.

On desktop the code works as expected with the files in either location.

PDB debugger connected.
Traceback (most recent call last):
  File "/$debug/main.py", line 12, in run
    dbg._run(tgt)
  File "/lib/python3.11/pdb.py", line 1646, in _run
    self.run(target.code)
  File "/lib/python3.11/bdb.py", line 597, in run
    exec(cmd, globals, locals)
  File "<string>", line 1, in <module>
  File "/workspace/src/consume.py", line 1, in <module>
    from declare import func
ModuleNotFoundError: No module named 'declare'

During handling of the above exception, another exception occurred:

Traceback (most recent call last):
  File "/$debug/main.py", line 31, in <module>
    run(debugger, target)
  File "/$debug/main.py", line 25, in run
    dbg.interaction(None, t)
  File "/lib/python3.11/pdb.py", line 434, in interaction
    self.print_stack_entry(self.stack[self.curindex])
  File "/lib/python3.11/pdb.py", line 1553, in print_stack_entry
    self.message(prefix +
  File "/lib/python3.11/pdb.py", line 535, in message
    print(msg, file=self.stdout)
OSError: [Errno 8] Bad file descriptor

Reproduce the failure with src/declare.py and src/consume.py using “Debug Python File in WASM” after comparing it with “Run Python File in WASM.” Start by tracing the debugger entry point for workspace subdirectories and the reported ModuleNotFoundError; done means debugging prints “success” in the Debug Console without the import or descriptor errors.