[Remote-Tunnels] Cannot connect to tunnel (error: "Tunnel connection closed undefined")

• Local VSCode Version: 1.92.2
• Local OS Version: Win10 Pro
• Remote OS Version: Ubuntu 22.04 x64
• Remote VS Code CLI Version: 1.92.2
• Remote Extension/Connection Type: Remote - Tunnels v1.5.2

Steps to Reproduce:

1. created the Azure VM Ubuntu 22.04 LTS. My understanding of the MS Dev Tunnels is that only the outbound connection is needed, thus this VM does not have a public IP (later on I verified that after public access is enabled the behaviour is exactly the same as below regardless of inbound/outbound rules).
2. on remote: sudo curl -Lk 'https://code.visualstudio.com/sha/download?build=stable&os=cli-alpine-x64' --output vscode_cli.tar.gz
3. unpack, etc.
4. code tunnel --verbose --name myname
5. Login via Microsoft Account. (Later on I tested the GitHub account authorization and the effect is the same)
6. Logs:

*
* Visual Studio Code Server
*
* By using the software, you agree to
* the Visual Studio Code Server License Terms (https://aka.ms/vscode-server-license) and
* the Microsoft Privacy Statement (https://privacy.microsoft.com/en-US/privacystatement).
*
[2024-08-16 14:08:05] debug Starting tunnel with `code code tunnel --verbose --name myname`
[2024-08-16 14:08:05] debug starting as new singleton
[2024-08-16 14:08:05] debug Found a persisted tunnel, seeing if the name matches...
[2024-08-16 14:08:05] debug Using file keychain storage due to: user prefers file storage:
[2024-08-16 14:08:05] trace Found token in keyring
[2024-08-16 14:08:05] debug [reqwest::connect] starting new connection: https://euw.rel.tunnels.api.visualstudio.com/
[2024-08-16 14:08:05] debug Tunnel name changed, applying updates...
[2024-08-16 14:08:05] trace Found token in keyring
[2024-08-16 14:08:05] trace Found token in keyring
[2024-08-16 14:08:06] debug Starting tunnel to server...
[2024-08-16 14:08:06] trace Found token in keyring
[2024-08-16 14:08:06] debug [tungstenite::handshake::client] Client handshake done.
[2024-08-16 14:08:06] debug [russh::ssh_read] read_ssh_id: reading
[2024-08-16 14:08:06] debug [russh::ssh_read] read 39
[2024-08-16 14:08:06] debug [russh::ssh_read] Ok("SSH-2.0-Microsoft.DevTunnels.Ssh_3.11\r\n")
[2024-08-16 14:08:06] debug [russh::client] writing 352 bytes
[2024-08-16 14:08:06] debug [russh::ssh_read] id 39 39
[2024-08-16 14:08:06] debug [russh::client::kex] extending []
[2024-08-16 14:08:06] debug [russh::client::kex] algo = Names { kex: Name("none"), key: Name("none"), cipher: Name("none"), client_mac: Name("none"), server_mac: Name("none"), server_compression: None, client_compression: None, ignore_guessed: false }
[2024-08-16 14:08:06] debug [russh::client::kex] write = []
[2024-08-16 14:08:06] debug [russh::client::kex] i0 = 342
[2024-08-16 14:08:06] debug [russh::client::kex] moving to kexdhdone, exchange = Exchange { client_id: CryptoVec { p: <ADDRESS>, size: 20, capacity: 32 }, server_id: CryptoVec { p: <ADDRESS>, size: 37, capacity: 64 }, client_kex_init: CryptoVec { p: <ADDRESS>, size: 342, capacity: 512 }, server_kex_init: CryptoVec { p: <ADDRESS>, size: 94, capacity: 128 }, client_ephemeral: CryptoVec { p: 0x1, size: 0, capacity: 0 }, server_ephemeral: 
CryptoVec { p: 0x1, size: 0, capacity: 0 } }
[2024-08-16 14:08:06] debug [tunnels::connections::relay_tunnel_host] established host relay primary session
[2024-08-16 14:08:06] trace Found token in keyring
[2024-08-16 14:08:06] debug Connected to tunnel endpoint: TunnelRelayTunnelEndpoint { base: TunnelEndpoint { id: "<ID>-relay", connection_mode: TunnelRelay, host_id: "<ID>", host_public_keys: [], port_uri_format: Some("https://<ID>-{port}.euw.devtunnels.ms/"), tunnel_uri: Some("https://<ID>.euw.devtunnels.ms/"), port_ssh_command_format: Some("ssh <ID>-{port}@ssh.euw.devtunnels.ms"), tunnel_ssh_command: Some("ssh <ID>@ssh.euw.devtunnels.ms"), ssh_gateway_public_key: None }, host_relay_uri: Some("wss://euw-data.rel.tunnels.api.visualstudio.com/api/v1/Host/Connect/joyful-hill-<ID>"), client_relay_uri: Some("wss://euw-data.rel.tunnels.api.visualstudio.com/api/v1/Client/Connect/joyful-hill-<ID>") }
[2024-08-16 14:08:06] debug Visual Studio Code Server is listening for incoming connections

Open this link in your browser https://vscode.dev/tunnel/myname

[2024-08-16 14:08:06] trace Found token in keyring

So far so good, I thought - let's connect into that tunnel!

7. On local machine open the VSCode, press Connect to tunnel (connecting via https://vscode.dev/tunnel/myname gives same results)
8. Login to Microsoft account
9. The myname tunnel is listed and state is running
10. Try to connect.
11. Then this happens after 5 seconds:
    
12. The devtools logs:
    
    
13. Remote machine logs:

[2024-08-16 14:08:35] debug [russh::client::encrypted] confirming channel: OpenChannelMessage { typ: Unknown { typ: [99, 108, 105, 101, 110, 116, 45, 115, 115, 104, 45, 115, 101, 115, 115, 105, 111, 110, 45, 115, 116, 114, 101, 97, 109] }, recipient_channel: 0, recipient_window_size: 5242880, recipient_maximum_packet_size: 32768 }
[2024-08-16 14:08:35] info [tunnels::connections::relay_tunnel_host] Opened new client on channel 2
[2024-08-16 14:08:35] debug [tunnels::connections::relay_tunnel_host] starting to serve host relay client session
[2024-08-16 14:08:35] info [russh::server] wrote id
[2024-08-16 14:08:35] debug [russh::ssh_read] read_ssh_id: reading
[2024-08-16 14:08:35] debug [russh::client::encrypted] channel_window_adjust
[2024-08-16 14:08:35] debug [russh::client::encrypted] amount: 4194326
[2024-08-16 14:08:35] debug [russh::ssh_read] read 33
[2024-08-16 14:08:35] debug [russh::ssh_read] Ok("SSH-2.0-dev-tunnels-ssh_3.11.36\r\n")
[2024-08-16 14:08:35] debug [russh::server::kex] server kex init: [20, 134, 137, 77, 136, 82, 41, 203, 167, 177, 125, 110, 251, 90, 119, 233, 86, 0, 0, 0, 95, 100, 105, 102, 102, 105, 101, 45, 104, 101, 108, 108, 109, 97, 110, 45, 103, 114, 111, 117, 112, 49, 52, 45, 115, 104, 97, 50, 

...deleted some lines...

, 110, 111, 110, 101, 0, 0, 0, 26, 122, 108, 105, 98, 44, 122, 108, 105, 98, 64, 111, 112, 101, 110, 115, 115, 104, 46, 99, 111, 109, 44, 110, 111, 110, 101, 0, 0, 0, 0, 0, 0, 0, 0, 0, 0, 0, 0, 0]
[2024-08-16 14:08:35] info [russh::server] read other id
[2024-08-16 14:08:35] info [russh::server] session is running
[2024-08-16 14:08:35] debug [russh::ssh_read] id 33 33
[2024-08-16 14:08:37] debug [russh::server::kex] server kexdhdone.exchange = Exchange { client_id: CryptoVec { p: <ADDRESS>, size: 31, capacity: 32 
}, server_id: CryptoVec { p: <ADDRESS>, size: 20, capacity: 32 }, client_kex_init: CryptoVec { p: <ADDRESS>, size: 453, capacity: 512 }, server[2024-08-16 14:08:35] info [russh::server] read other id
[2024-08-16 14:08:35] info [russh::server] session is running
[2024-08-16 14:08:35] debug [russh::ssh_read] id 33 33
[2024-08-16 14:08:37] debug [russh::server::kex] server kexdhdone.exchange = Exchange { client_id: CryptoVec { p: <ADDRESS>, size: 31, capacity: 32 
}, server_id: CryptoVec { p: <ADDRESS>, size: 20, capacity: 32 }, client_kex_init: CryptoVec { p: <ADDRESS>, size: 453, capacity: 512 }, server_kex_init: CryptoVec { p: <ADDRESS>, size: 554, capacity: 1024 }, client_ephemeral: CryptoVec { p: <ADDRESS>, size: 256, capacity: 256 }, server_ephemeral: CryptoVec { p: <ADDRESS>, size: 256, capacity: 256 } }
[2024-08-16 14:08:37] debug [russh::server::kex] exchange hash: CryptoVec { p: <ADDRESS>, size: 32, capacity: 32 }
[2024-08-16 14:08:37] debug [russh::server::kex] signing with key 0
[2024-08-16 14:08:37] debug [russh::server::kex] hash: CryptoVec { p: <ADDRESS>, size: 32, capacity: 32 }
[2024-08-16 14:08:37] debug [russh::server::kex] key: RSA { (hidden) }
[2024-08-16 14:08:37] debug [russh::server::encrypted] request: Ok("ssh-userauth")
[2024-08-16 14:08:35] info [russh::server] read other id
[2024-08-16 14:08:35] info [russh::server] session is running
[2024-08-16 14:08:35] debug [russh::ssh_read] id 33 33
[2024-08-16 14:08:37] debug [russh::server::kex] server kexdhdone.exchange = Exchange { client_id: CryptoVec { p: <ADDRESS>, size: 31, capacity: 32 
}, server_id: CryptoVec { p: <ADDRESS>, size: 20, capacity: 32 }, client_kex_init: CryptoVec { p: <ADDRESS>, size: 453, capacity: 512 }, server_kex_init: CryptoVec { p: <ADDRESS>, size: 554, capacity: 1024 }, client_ephemeral: CryptoVec { p: <ADDRESS>, size: 256, capacity: 256 }, server_ephemeral: CryptoVec { p: <ADDRESS>, size: 256, capacity: 256 } }
[2024-08-16 14:08:37] debug [russh::server::kex] exchange hash: CryptoVec { p: <ADDRESS>, size: 32, capacity: 32 }
[2024-08-16 14:08:37] debug [russh::server::kex] signing with key 0
[2024-08-16 14:08:37] debug [russh::server::kex] hash: CryptoVec { p: <ADDRESS>, size: 32, capacity: 32 }
[2024-08-16 14:08:35] info [russh::server] read other id
[2024-08-16 14:08:35] info [russh::server] session is running
[2024-08-16 14:08:35] debug [russh::ssh_read] id 33 33
[2024-08-16 14:08:37] debug [russh::server::kex] server kexdhdone.exchange = Exchange { client_id: CryptoVec { p: <ADDRESS>, size: 31, capacity: 32 
}, server_id: CryptoVec { p: <ADDRESS>, size: 20, capacity: 32 }, client_kex_init: CryptoVec { p: <ADDRESS>, size: 453, capacity: 512 }, server_kex_init: CryptoVec { p: <ADDRESS>, size: 554, capacity: 1024 }, client_ephemeral: CryptoVec { p: <ADDRESS>, size: 256, capacity: 256 }, serve[2024-08-16 14:08:35] info [russh::server] session is running
[2024-08-16 14:08:35] debug [russh::ssh_read] id 33 33
[2024-08-16 14:08:37] debug [russh::server::kex] server kexdhdone.exchange = Exchange { client_id: CryptoVec { p: <ADDRESS>, size: 31, capacity: 32 
}, server_id: CryptoVec { p: <ADDRESS>, size: 20, capacity: 32 }, client_kex_init: CryptoVec { p: <ADDRESS>, size: 453, capacity: 512 }, server[2024-08-16 14:08:37] debug [russh::server::kex] server kexdhdone.exchange = Exchange { client_id: CryptoVec { p: <ADDRESS>, size: 31, capacity: 32 
}, server_id: CryptoVec { p: <ADDRESS>, size: 20, capacity: 32 }, client_kex_init: CryptoVec { p: <ADDRESS>, size: 453, capacity: 512 }, server_kex_init: CryptoVec { p: <ADDRESS>, size: 554, capacity: 1024 }, client_ephemeral: CryptoVec { p: <ADDRESS>, size: 256, capacity: 256 }, server_ephemeral: CryptoVec { p: <ADDRESS>, size: 256, capacity: 256 } }
[2024-08-16 14:08:37] debug [russh::server::kex] exchange hash: CryptoVec { p: <ADDRESS>, size: 32, capacity: 32 }
[2024-08-16 14:08:37] debug [russh::server::kex] signing with key 0
[2024-08-16 14:08:37] debug [russh::server::kex] hash: CryptoVec { p: <ADDRESS>, size: 32, capacity: 32 }
[2024-08-16 14:08:37] debug [russh::server::kex] key: RSA { (hidden) }
[2024-08-16 14:08:37] debug [russh::server::encrypted] request: Ok("ssh-userauth")
[2024-08-16 14:08:37] debug [russh::server::encrypted] name: "tunnel" Ok("ssh-connection") Ok("none")
[2024-08-16 14:08:37] debug [tunnels::connections::relay_tunnel_host] host relay client session successfully authed
_kex_init: CryptoVec { p: <ADDRESS>, size: 554, capacity: 1024 }, client_ephemeral: CryptoVec { p: <ADDRESS>, size: 256, capacity: 256 }, server_ephemeral: CryptoVec { p: <ADDRESS>, size: 256, capacity: 256 } }
[2024-08-16 14:08:37] debug [russh::server::kex] exchange hash: CryptoVec { p: <ADDRESS>, size: 32, capacity: 32 }
[2024-08-16 14:08:37] debug [russh::server::kex] signing with key 0
[2024-08-16 14:08:37] debug [russh::server::kex] hash: CryptoVec { p: <ADDRESS>, size: 32, capacity: 32 }
[2024-08-16 14:08:37] debug [russh::server::kex] key: RSA { (hidden) }
[2024-08-16 14:08:37] debug [russh::server::encrypted] request: Ok("ssh-userauth")
[2024-08-16 14:08:37] debug [russh::server::encrypted] name: "tunnel" Ok("ssh-connection") Ok("none")
[2024-08-16 14:08:37] debug [tunnels::connections::relay_tunnel_host] host relay client session successfully authed
[2024-08-16 14:08:37] debug [russh::server::kex] hash: CryptoVec { p: <ADDRESS>, size: 32, capacity: 32 }
[2024-08-16 14:08:37] debug [russh::server::kex] key: RSA { (hidden) }
[2024-08-16 14:08:37] debug [russh::server::encrypted] request: Ok("ssh-userauth")
[2024-08-16 14:08:37] debug [russh::server::encrypted] name: "tunnel" Ok("ssh-connection") Ok("none")
[2024-08-16 14:08:37] debug [tunnels::connections::relay_tunnel_host] host relay client session successfully authed
[2024-08-16 14:08:37] debug [rpc.0] Serving new connection

[2024-08-16 14:08:37] debug [russh::server::encrypted] name: "tunnel" Ok("ssh-connection") Ok("none")
[2024-08-16 14:08:37] debug [tunnels::connections::relay_tunnel_host] host relay client session successfully authed
[2024-08-16 14:08:37] debug [rpc.0] Serving new connection


[2024-08-16 14:08:37] debug [rpc.0] Serving new connection

14. Afterwards once I press Close tunnel then I see this on remote host:

[2024-08-16 14:09:37] info [rpc.0] Disposed of connection to running server.

Basically no errors are shown on the remote.

Guys, where to start an investigation? What am I doing wrong?

Does this issue occur when you try this locally?: What does locally mean in here?
Does this issue occur when you try this locally and all extensions are disabled?: Haven't verified yet
https://code.visualstudio.com/insiders/ gives similar result.