microsoft / microsoft/vscode

Copilot Chat: large streamed terminal output preview tanks UI performance/responsiveness

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Description

```
Version: 1.137.0 (Universal)
Commit: 645f29cc3176500b4b5762ba887cf2a7f0ffdf2c
Date: 2026-09-08T13:43:59-07:00
Electron: 42.10.0
ElectronBuildId: 15109253
Chromium: 148.0.7778.280
Node.js: 24.18.1
V8: 14.8.178.38-electron.0
@github/copilot: 1.0.84.70.gdb75d0d
@github/copilot-sdk: 1.0.13-preview.4
OS: Darwin arm64 25.5.0
```

When an agent in Copilot Chat runs a terminal command with a LOT of output, the terminal streaming back to the UI can make VSCode UI sluggish or unresponsive.

Example - agent asked to view list of metric tags which was a lot of output (~80MB):
Image

Even though the terminal output over a certain size will be spilled to a secondary file and not all the output returned to the agent/model, the inline terminal UI still renders it all meaning the performance is very sluggish or straight up freezes.

Steps to Reproduce:

1. Ask agent to run a command in terminal with large output - e.g. `chunk=$(yes '0123456789abcdefghijklmnopqrstuvwxyzABCDEFGHIJKLMNOPQRSTUVWXYZ' | head -c 1023); for i in $(seq 1 20480); do; printf '%s\n' "$chunk"; done`
2. Notice the UI is sluggish

Contributor guide

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