Backgrounded VSCode window throttles integrated terminal and Remote-SSH processes on Windows

Reproduce the slowdown on Windows with both local integrated terminals and Remote-SSH, comparing focused and backgrounded VS Code windows. Start by investigating the terminal output behavior, Electron background throttling, xterm.js refresh scheduling, and Remote-SSH terminal event handling mentioned in the report. Done means terminal and remote processes maintain normal execution speed when VS Code is unfocused or minimized, with the behavior verified against the macOS comparison.

Type: Bug

## Problem Description
After updating VSCode to a newer version, terminal processes become extremely slow whenever the VSCode window loses focus or is minimized on Windows.
This issue affects both:

• local integrated terminal processes
• Remote-SSH sessions running on remote Linux servers
  The slowdown is severe enough that remote CPU utilization drops dramatically when the local VSCode window is placed in the background.
  Once VSCode returns to the foreground, execution speed and remote CPU utilization immediately recover.
  This behavior does NOT occur on macOS.
  

Key Observation

Programs with continuous terminal output or actively updating progress bars (such as tqdm in deep learning training scripts) are mostly unaffected.
However, programs with minimal terminal output become extremely slow when VSCode is unfocused.
This strongly suggests the issue may be related to:

• terminal/PTTY update handling
• stdout/stderr buffering
• Electron background throttling
• xterm.js refresh scheduling
• Remote-SSH terminal event handling
  

Steps to Reproduce

Local Terminal

1. Open VSCode on Windows
2. Start a long-running CPU-intensive process in the integrated terminal
3. Switch focus to another application or minimize VSCode
4. Observe significant slowdown
5. Bring VSCode back to foreground
6. Execution speed immediately recovers

Remote-SSH

1. Connect to a remote Linux server using Remote-SSH
2. Start a CPU-intensive task remotely
3. Monitor remote CPU utilization using htop
4. Minimize VSCode or switch focus away
5. Observe remote CPU utilization dropping significantly
6. Return VSCode to foreground
7. Remote CPU utilization immediately returns to normal
   

Expected Behavior

Terminal processes should continue executing at normal speed regardless of whether the VSCode window is focused.
Remote server computation should not depend on local VSCode window focus state.


Actual Behavior

When VSCode is unfocused or minimized on Windows:

• integrated terminal processes slow down dramatically
• Remote-SSH tasks also slow down
• remote CPU utilization drops significantly
• execution speed becomes extremely slow

When VSCode regains focus:

• execution speed immediately recovers
• remote CPU utilization returns to normal
  

Additional Notes

• The issue started after updating VSCode
• macOS does not reproduce the problem
• Continuous terminal output (e.g. tqdm progress bars) significantly reduces or avoids the issue
• The problem appears strongly correlated with terminal output activity

VS Code version: Code 1.120.0 (0958016b2af9f09bb4257e0df4a95e2f90590f9f, 2026-05-12T20:17:22Z)
OS version: Windows_NT x64 10.0.26200
Modes:
Remote OS version: Linux x64 6.17.0-29-generic
Remote OS version: Linux x64 6.6.87.2-microsoft-standard-WSL2

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