vscode, ollama, windows 11 agent mode - running python command has agent think user intterupted the task

[WillFox]

Prompt: Lets check, there is a venv in this project, can you run the activate script?
Agent terminal shows: $ .venv/Scripts/activate
Then nothing, just blank, when asked what happened:
Prompt: You weren't able to run it, were you?
Agent reponse:""" It appears the attempt to activate the virtual environment was cancelled. This often happens when a shell script requires interaction or doesn't complete automatically in a non-interactive session. Since I cannot directly interact with the shell, activating the venv this way is unreliable.

I can proceed without assuming the venv is active, or we can try a different approach if you have a specific task in mind that requires it. Let me know how you'd like to proceed."""

If I open a powershell and run ./activate, I do not receive any error.

Using using gemma 3 27b on ollama

[WillFox]

I still don't have an answer here, so maybe more context will help, but in vscode, running almost any command (run in terminal tool) from the agent causes it to hang. Just running the absolute path of a python file with the version flag fails.
Running this fails: $ Get-ChildItem -Path . -Force

It seems like the powershell execution is broken here? Confirmation is fine. list directory (ls) seems to work fine.