azd init on fresh install fails on macOS

[dariuszparys]

• Make sure you've installed the latest version using instructions in the wiki

Output from azd version
azd version 1.12.0 (commit dc37b93)

Describe the bug
After installing azd for the first time running azd init it only asks for
? Enter a new environment name: instead of going through the selection dialogue.

See attached screenshot

The project analyzed is an .NET Aspire 9.1 project

To Reproduce

1. Cleanup existing azd structure and installation

rm -rf ˜/.azure
rm -rf ˜/.azd
brew uninstall azd
cd project
rm -rf .azure
rm azure.yaml
rm next-steps.md

2. Reinstall azd and init

brew tap azure/azd && brew install azd
az login
cd project
azd init

This is given the shown error.

Expected behavior
Running azd init should respond with this dialog

Environment
Information on your environment:
* en-US
* macOS Sequoia 15.3.1
* .NET V9.0.200
* .NET Aspire 9.1.0
* nvim

[weikanglim]

Hey @dariuszparys 👋 Thanks for taking the time to log an issue!

azd init it only asks for ? Enter a new environment name:

From what I gleaned at the implementation, azd would prompt singly for an environment name if an existing azure.yaml in the working direcotry is already detected. I could see from the repro steps provided that rm azure.yaml was ran at some point, but I'm curious that project directory having an existing azure.yaml may still be related here.