Failed to configure project - Cannot nest output folder

I am unable to open a gradle project in VS Code without the below error message occurring. It prevents the java imports from processing properly, as it says they cannot be found.

[Error - 6:14:53 PM] Feb 11, 2020 6:14:53 PM Failed to configure project extension-project-starter Cannot nest output folder 'extension-project-starter/bin/main' inside output folder 'extension-project-starter/bin' Java Model Exception: Java Model Status [Cannot nest output folder 'extension-project-starter/bin/main' inside output folder 'extension-project-starter/bin'] at org.eclipse.jdt.internal.core.JavaModelOperation.runOperation(JavaModelOperation.java:798) at org.eclipse.jdt.internal.core.JavaProject.setRawClasspath(JavaProject.java:3573) at org.eclipse.jdt.internal.core.JavaProject.setRawClasspath(JavaProject.java:3533) at org.eclipse.jdt.internal.core.JavaProject.setRawClasspath(JavaProject.java:3546) at org.eclipse.jdt.internal.core.JavaProject.setOutputLocation(JavaProject.java:3489) at org.eclipse.buildship.core.internal.workspace.OutputLocationUpdater.update(OutputLocationUpdater.java:37) at org.eclipse.buildship.core.internal.workspace.BaseConfigurator.synchronizeJavaProjectInTransaction(BaseConfigurator.java:115) at org.eclipse.buildship.core.internal.workspace.BaseConfigurator.access$000(BaseConfigurator.java:40) at org.eclipse.buildship.core.internal.workspace.BaseConfigurator$1.run(BaseConfigurator.java:105) at org.eclipse.jdt.internal.core.BatchOperation.executeOperation(BatchOperation.java:41) at org.eclipse.jdt.internal.core.JavaModelOperation.run(JavaModelOperation.java:736) at org.eclipse.core.internal.resources.Workspace.run(Workspace.java:2292) at org.eclipse.core.internal.resources.Workspace.run(Workspace.java:2317) at org.eclipse.jdt.core.JavaCore.run(JavaCore.java:5862) at org.eclipse.jdt.core.JavaCore.run(JavaCore.java:5819) at org.eclipse.buildship.core.internal.workspace.BaseConfigurator.synchronizeJavaProject(BaseConfigurator.java:101) at org.eclipse.buildship.core.internal.workspace.BaseConfigurator.configure(BaseConfigurator.java:91) at org.eclipse.buildship.core.internal.workspace.BaseConfigurator.configure(BaseConfigurator.java:66) at org.eclipse.buildship.core.internal.extension.InternalProjectConfigurator.configure(InternalProjectConfigurator.java:65) at org.eclipse.buildship.core.internal.workspace.ProjectConfigurators.configureConfigurators(ProjectConfigurators.java:68) at org.eclipse.buildship.core.internal.workspace.SynchronizeGradleBuildOperation.synchronizeOpenWorkspaceProject(SynchronizeGradleBuildOperation.java:163) at org.eclipse.buildship.core.internal.workspace.SynchronizeGradleBuildOperation.synchronizeWorkspaceProject(SynchronizeGradleBuildOperation.java:137) at org.eclipse.buildship.core.internal.workspace.SynchronizeGradleBuildOperation.synchronizeGradleProjectWithWorkspaceProject(SynchronizeGradleBuildOperation.java:127) at org.eclipse.buildship.core.internal.workspace.SynchronizeGradleBuildOperation.access$000(SynchronizeGradleBuildOperation.java:42) at org.eclipse.buildship.core.internal.workspace.SynchronizeGradleBuildOperation$1.run(SynchronizeGradleBuildOperation.java:85) at org.eclipse.core.internal.resources.Workspace.run(Workspace.java:2292) at org.eclipse.core.internal.resources.Workspace.run(Workspace.java:2312) at org.eclipse.buildship.core.internal.workspace.SynchronizeGradleBuildOperation.synchronizeProjectsWithWorkspace(SynchronizeGradleBuildOperation.java:82) at org.eclipse.buildship.core.internal.workspace.SynchronizeGradleBuildOperation.run(SynchronizeGradleBuildOperation.java:64) at org.eclipse.buildship.core.internal.DefaultGradleBuild$SynchronizeOperation.runInToolingApi(DefaultGradleBuild.java:230) at org.eclipse.buildship.core.internal.operation.DefaultToolingApiOperationManager$WorkspaceRunnableAdapter.run(DefaultToolingApiOperationManager.java:58) at org.eclipse.core.internal.resources.Workspace.run(Workspace.java:2292) at org.eclipse.core.internal.resources.Workspace.run(Workspace.java:2317) at org.eclipse.buildship.core.internal.operation.DefaultToolingApiOperationManager.run(DefaultToolingApiOperationManager.java:39) at org.eclipse.buildship.core.internal.DefaultGradleBuild$SynchronizeOperation.run(DefaultGradleBuild.java:192) at org.eclipse.buildship.core.internal.DefaultGradleBuild.synchronize(DefaultGradleBuild.java:100) at org.eclipse.buildship.core.internal.DefaultGradleBuild.synchronize(DefaultGradleBuild.java:86) at org.eclipse.jdt.ls.core.internal.managers.GradleBuildSupport.update(GradleBuildSupport.java:58) at org.eclipse.jdt.ls.core.internal.managers.ProjectsManager$3.runInWorkspace(ProjectsManager.java:537) at org.eclipse.core.internal.resources.InternalWorkspaceJob.run(InternalWorkspaceJob.java:42) at org.eclipse.core.internal.jobs.Worker.run(Worker.java:63)

Environment

• Operating System: Mac OSX
• JDK version: openjdk version "1.8.0_212"
• Visual Studio Code version: 1.42.0
• Java extension version: 0.55.1

Steps To Reproduce

1. Open project file that has build.gradle
2. Error fires

[attach a sample project reproducing the error]
attach logs

Current Result

Project does not configure, and all my java files say imports not found

Expected Result

The project configures

Additional Informations

Start by reproducing the failure with a Gradle project in VS Code, then inspect the OutputLocationUpdater.java and BaseConfigurator.java entry points named in the stack trace. Check how the nested output folders are configured and verify that synchronization completes and Java imports resolve without the reported error.