SSH Hanging, reloading, DevContainers issue since latest update

[kim-gtek]

Does this issue occur when all extensions are disabled?: Yes/No

Version: 1.96.2 (user setup)
Commit: fabdb6a
Date: 2024-12-19T10:22:47.216Z
Electron: 32.2.6
ElectronBuildId: 10629634
Chromium: 128.0.6613.186
Node.js: 20.18.1
V8: 12.8.374.38-electron.0
OS: Windows_NT x64 10.0.26120

Steps to Reproduce:

1. Update to latest vs code
2. SSH to linux ubuntu servers ( I have tried on 3, an AWS, an OVH and a personal server I usually connect to)
3. The first error I got was 'Setting up DevContainers' Hanging.
4. The second error I have is Setting up SSH host - It repeats every few seconds.

Terminals and folder structure are correctly open and visible. It is impossible to control the terminal, when I type, the characters appear every now and then when the last 'Setting up SSH host' has finished.

If I leave VS code for a while it works, briefly. If I switch windows, it starts again.
I have tried Rebuilding DevContainers without cache - that worked for the first error.
I cannot fix the second - it is impossible to use SSH in the current state.

Reddit post from someone with similar issue
https://www.reddit.com/r/vscode/comments/1hi0j8r/latest_vscode_has_major_bug_broke_all/