diff --git a/src/commands/workspaces.ts b/src/commands/workspaces.ts
index 17a1045..e9b85d7 100644
--- a/src/commands/workspaces.ts
+++ b/src/commands/workspaces.ts
@@ -350,6 +350,7 @@ export class ConnectInCurrentWindowCommand implements Command {
 
 	private async initializeLocalSSH(workspaceId: string) {
 		try {
+			await this.remoteService.updateRemoteSSHConfig(true, undefined);
 			await Promise.all([
 				this.remoteService.setupSSHProxy(),
 				this.remoteService.startLocalSSHServiceServer()
diff --git a/src/remoteConnector.ts b/src/remoteConnector.ts
index 908c70c..34d54ef 100644
--- a/src/remoteConnector.ts
+++ b/src/remoteConnector.ts
@@ -580,31 +580,12 @@ export class RemoteConnector extends Disposable {
 		});
 	}
 
-	private async updateRemoteSSHConfig(usingSSHGateway: boolean, localAppSSHConfigPath: string | undefined) {
-		const remoteSSHconfig = vscode.workspace.getConfiguration('remote.SSH');
-		const defaultExtConfigInfo = remoteSSHconfig.inspect<string[]>('defaultExtensions');
-		const defaultExtensions = defaultExtConfigInfo?.globalValue ?? [];
-		if (!defaultExtensions.includes('gitpod.gitpod-remote-ssh')) {
-			defaultExtensions.unshift('gitpod.gitpod-remote-ssh');
-			await remoteSSHconfig.update('defaultExtensions', defaultExtensions, vscode.ConfigurationTarget.Global);
-		}
-
-		const currentConfigFile = remoteSSHconfig.get<string>('configFile');
-		if (usingSSHGateway) {
-			if (currentConfigFile?.includes('gitpod_ssh_config')) {
-				await remoteSSHconfig.update('configFile', undefined, vscode.ConfigurationTarget.Global);
-			}
-		} else {
-			// TODO(ak) notify a user about config file changes?
-			if (currentConfigFile === localAppSSHConfigPath) {
-				// invalidate cached SSH targets from the current config file
-				await remoteSSHconfig.update('configFile', undefined, vscode.ConfigurationTarget.Global);
-			}
-			await remoteSSHconfig.update('configFile', localAppSSHConfigPath, vscode.ConfigurationTarget.Global);
+	private async ensureRemoteSSHExtInstalled(flow: UserFlowTelemetryProperties): Promise<boolean> {
+		const isOfficialVscode = vscode.env.uriScheme === 'vscode' || vscode.env.uriScheme === 'vscode-insiders';
+		if (!isOfficialVscode) {
+			return true;
 		}
-	}
 
-	private async ensureRemoteSSHExtInstalled(flow: UserFlowTelemetryProperties): Promise<boolean> {
 		const msVscodeRemoteExt = vscode.extensions.getExtension('ms-vscode-remote.remote-ssh');
 		if (msVscodeRemoteExt) {
 			return true;
@@ -704,7 +685,7 @@ export class RemoteConnector extends Disposable {
 					try {
 						this.telemetryService.sendUserFlowStatus('connecting', localSSHFlow);
 						// If needed, revert local-app changes first
-						await this.updateRemoteSSHConfig(true, undefined);
+						await this.remoteService.updateRemoteSSHConfig(true, undefined);
 
 						this.remoteService.flow = sshFlow;
 						await Promise.all([
@@ -834,7 +815,7 @@ export class RemoteConnector extends Disposable {
 					}
 				}
 
-				await this.updateRemoteSSHConfig(usingSSHGateway, localAppSSHConfigPath);
+				await this.remoteService.updateRemoteSSHConfig(usingSSHGateway, localAppSSHConfigPath);
 
 				await this.context.globalState.update(`${SSH_DEST_KEY}${sshDestination!.toRemoteSSHString()}`, { ...params } as SSHConnectionParams);
 
diff --git a/src/services/remoteService.ts b/src/services/remoteService.ts
index 717b170..dbc4531 100644
--- a/src/services/remoteService.ts
+++ b/src/services/remoteService.ts
@@ -43,6 +43,7 @@ export interface IRemoteService {
     getWorkspaceSSHDestination(wsData: WorkspaceData): Promise<{ destination: SSHDestination; password?: string }>;
     showSSHPasswordModal(wsData: WorkspaceData, password: string): Promise<void>;
 
+    updateRemoteSSHConfig(usingSSHGateway: boolean, localAppSSHConfigPath: string | undefined): Promise<void>;
     initializeRemoteExtensions(): Promise<void>;
 }
 
@@ -177,11 +178,12 @@ export class RemoteService extends Disposable implements IRemoteService {
         await SSHConfiguration.saveGitpodSSHConfig(gitpodConfig);
     }
 
-    private getHostSSHConfig(host: string, launcher: string, proxyScript: string, extIpcPort: number, logLevel:string) {
+    private getHostSSHConfig(host: string, launcher: string, proxyScript: string, extIpcPort: number, logLevel: string) {
+        const extraArgs = (process.versions['electron'] && process.versions['microsoft-build']) ? '--ms-enable-electron-run-as-node' : '';
         return {
             Host: '*.' + getLocalSSHDomain(host),
             StrictHostKeyChecking: 'no',
-            ProxyCommand: `"${launcher}" "${process.execPath}" "${proxyScript}" --ms-enable-electron-run-as-node %h ${extIpcPort} ${vscode.env.machineId} ${logLevel}`
+            ProxyCommand: `"${launcher}" "${process.execPath}" "${proxyScript}" ${extraArgs} %h ${extIpcPort} ${vscode.env.machineId} ${logLevel}`
         };
     }
 
@@ -326,6 +328,30 @@ export class RemoteService extends Disposable implements IRemoteService {
         throw new Error('SSH password modal dialog, Canceled');
     }
 
+    async updateRemoteSSHConfig(usingSSHGateway: boolean, localAppSSHConfigPath: string | undefined) {
+        const remoteSSHconfig = vscode.workspace.getConfiguration('remote.SSH');
+        const defaultExtConfigInfo = remoteSSHconfig.inspect<string[]>('defaultExtensions');
+        const defaultExtensions = defaultExtConfigInfo?.globalValue ?? [];
+        if (!defaultExtensions.includes('gitpod.gitpod-remote-ssh')) {
+            defaultExtensions.unshift('gitpod.gitpod-remote-ssh');
+            await remoteSSHconfig.update('defaultExtensions', defaultExtensions, vscode.ConfigurationTarget.Global);
+        }
+
+        const currentConfigFile = remoteSSHconfig.get<string>('configFile');
+        if (usingSSHGateway) {
+            if (currentConfigFile?.includes('gitpod_ssh_config')) {
+                await remoteSSHconfig.update('configFile', undefined, vscode.ConfigurationTarget.Global);
+            }
+        } else {
+            // TODO(ak) notify a user about config file changes?
+            if (currentConfigFile === localAppSSHConfigPath) {
+                // invalidate cached SSH targets from the current config file
+                await remoteSSHconfig.update('configFile', undefined, vscode.ConfigurationTarget.Global);
+            }
+            await remoteSSHconfig.update('configFile', localAppSSHConfigPath, vscode.ConfigurationTarget.Global);
+        }
+    }
+
     async initializeRemoteExtensions() {
         let flowData = this.flow ?? { gitpodHost: this.hostService.gitpodHost, userId: this.sessionService.safeGetUserId() };
         flowData = { ...flowData, flow: 'sync_local_extensions', useLocalAPP: String(Configuration.getUseLocalApp()) };