Version: 1.50.0-insider (user setup)
Commit: 9e505675670d65138405321a60b0df4ddec28799
Date: 2020-09-16T06:49:37.816Z (7 hrs ago)
Electron: 9.3.0
Chrome: 83.0.4103.122
Node.js: 12.14.1
V8: 8.3.110.13-electron.0
OS: Windows_NT x64 10.0.19042
Steps to Reproduce:
Debug toolbar will appear and integrated terminal opens at bottom, at this moment get an error message:
The terminal process "C:\Program Files\PowerShell\7\pwsh.exe" terminated with exit code: 3221225786.
After a research I made it work, but only with Command Prompt as default terminal and not the powershell 7.
Following this guide: https://code.visualstudio.com/docs/supporting/troubleshoot-terminal-launch#_terminal-exits-with-code-3221225786-or-similar
The error occurs only with powershell core (I'm with version 7.0.3).
Also tested with Windows Powershell, gets no error but doesn't work too.
So you did disable legacy console mode? You should also try this if you have anti-virus software https://code.visualstudio.com/docs/supporting/troubleshoot-terminal-launch#_error-connectnamedpipe-failed-windows-error-232
Do you have any terminal settings?
Yes, the normal cmd works with or without legacy. And no anti-virus, only default "Windows Defender".
Do you have any terminal settings?
That's the problem:
"terminal.integrated.shell.windows": "C:\\WINDOWS\\System32\\cmd.exe", << Works
"terminal.integrated.shell.windows": "C:\\WINDOWS\\System32\\WindowsPowerShell\\v1.0\\powershell.exe", << No error but doesn't work
"terminal.integrated.shell.windows": "C:\\Program Files\\PowerShell\\7\\pwsh.exe", << Gives 3221225786 error and doesn't work

The same setup worked before update to 1.50.0-insider.
Need to do some config into powershell 7 terminal?
@Tyriar
This error occurred on the latest Insider Code and 1.0 and 7.x Powershell.
I have encountered this error on three different computers, and it did not happen in previous versions of Insider Code.
Even though I turned on (off by default!) Legacy Console Mode on Powershell, the error persists.
I think this error is not directly related to Legacy Console Mode

@lucianotres @zheung you must turn off legacy console mode, the terminal will break if it's enabled when the new backend conpty is used (Windows 1909+).
@lucianotres @zheung you must turn off legacy console mode, the terminal will break if it's enabled when the new backend conpty is used (Windows 1909+).
It is OFF!
It is turned off by default. I never checked this option
But the error still exists
ScreenRecord:

Yep. I've also recently (last week) been affected by this issue. (I tried with PowerShell 7.1.0-preview.7 and the non-preview latest version.)
I've subsequently changed the terminal to cmd instead of Powershell to work around the issue.
Yep. I've also recently (last week) been affected by this issue. (I tried with PowerShell 7.1.0-preview.7 and the non-preview latest version.)
I've subsequently changed the terminal to cmd instead of Powershell to work around the issue.
Exactly, only cmd works.
Yes @Tyriar, legacy console mode it's off. The issue it's with powershell only.
I'm experiencing the same that @zheung showed at gif.
I am seeing this behaviour as well in debugging of Python programs. Works fine on VSCode, fails in the manner detailed above in VSCode-Insiders. Powershell core 7.0.3.
Same issue here.
Powershell core 7.0.3 with VSCode-Insiders update to the lastest version of 1.50.0 and then same error msg.
The terminal process "C:\Program Files\PowerShell\7\pwsh.exe" terminated with exit code: 3221225786.
Same issue too.
FWIW I notice that the error code (3221225786, 0xC000013A) apparently represents when an application is exited via ctrl+c (STATUS_CONTROL_C_EXIT):
Most helpful comment
It is OFF!
It is turned off by default. I never checked this option
But the error still exists
ScreenRecord:
