Deleting one file deletes the entire parent folder

Type: Bug

I'm unsure if these first steps need to be taken:
1. Create new folder
2. Move a file from one folder up into this new folder

From here in that folder:
1. Create a file, leave the name empty and don't hit enter
2. Rename a different file, that's in the same folder
- The newly created file has no name
3. Delete the nameless file
> The parent folder gets deleted

VS Code version: Code 1.135.0 (08d4889f9ec4a1685d257b9b95de036c8e1ce1e5, 2026-08-25T14:26:52Z)
OS version: Windows_NT x64 10.0.26200
Modes:

System Info

|Item|Value|
|---|---|
|CPUs|11th Gen Intel(R) Core(TM) i7-11370H @ 3.30GHz (8 x 3302)|
|GPU Status|2d_canvas: enabled
GPU0: VENDOR= 0x8086, DEVICE=0x9a49 [Intel(R) Iris(R) Xe Graphics], DRIVER_VENDOR=Intel, DRIVER_VERSION=30.0.100.9864 *ACTIVE*
GPU1: VENDOR= 0x1414, DEVICE=0x008c [Microsoft Basic Render Driver], DRIVER_VERSION=10.0.26100.8972
Machine model name:
Machine model version:
direct_rendering_display_compositor: disabled_off_ok
gpu_compositing: enabled
multiple_raster_threads: enabled_on
opengl: enabled_on
rasterization: enabled
raw_draw: disabled_off_ok
skia_graphite: disabled_off
trees_in_viz: disabled_off
video_decode: enabled
video_encode: enabled
webgl: enabled
webgpu: enabled
webnn: disabled_off|
|Load (avg)|undefined|
|Memory (System)|15.80GB (2.41GB free)|
|Process Argv|--crash-reporter-id 1a7e6161-e759-4b2a-a1fd-c41341d88254|
|Screen Reader|no|
|VM|0%|

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jbcp_cls_pctr_t:31531130
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ahp-both-windows:31556933
sessions_5:31532894
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enable_editor_pane_layout:31569726
allow-none:31555437
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treatment-23-1:31555779
unuse_dynamic_mcp:31555281
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session-mark-done:31558131
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ccr_pr_nudge_control:1319470
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```