[1.131.0] - Locally hosted AI gateway/proxy no longer works
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Description
Does this issue occur when all extensions are disabled?: No (but issue is when using any relevant extension.
- VS Code Version: 1.131.0
- OS Version: Mac OS Sequoia 15.7.8
Steps to Reproduce:
1. Install any 3rd party AI extension
2. Add local instance of AI gateway proxy (e.g. LiteLLM) and get Connection Error (see below)
3. Rolling back to 1.130.0, everything works fine. Happens with every other 3rd party extension I've tried (roocode, cline, etc.) - issue does not happen outside of VS Code.
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