Does this issue occur when all extensions are disabled?: Yes
- VS Code Version: Code - OSS Dev 1.117.0, commit 50f36fc
- OS Version: Windows_NT x64 10.0.26200
When a marketplace extension is disabled and a dev extension with the same ID is running (via Extension Development Host), the disabled extension incorrectly shows a "Restart Extensions" badge. Clicking this badge removes the dev extension from EDH.
Steps to reproduce:
- Install extension "foo" from marketplace (e.g. "clangd"), disable it.
- Open extension "foo" source code in VS Code.
- Launch Extension Development Host (Run > Start Debugging).
Current behavior:
- In EDH, the disabled marketplace extension shows "Restart Extensions". Clicking the "Restart Extensions" badge removes the dev extension from EDH.
Expected behavior:
- No "Restart Extensions" badge shown.

Does this issue occur when all extensions are disabled?: Yes
When a marketplace extension is disabled and a dev extension with the same ID is running (via Extension Development Host), the disabled extension incorrectly shows a "Restart Extensions" badge. Clicking this badge removes the dev extension from EDH.
Steps to reproduce:
Current behavior:
Expected behavior: