How do I get around the verified bug in Windows 1903 and launch the VSCode integrated terminal?

Question

I just did a fresh install of Windows 10 Pro version 1903 build 18362.116 and Visual Studio Code. Now the integrated terminal only launches externally.

Pressing Ctrl + ~ results in this.

What am I missing? How do I get it to open integrated again?

EDIT

After working with VSCode team it is a verified bug. See the Github issue here. I posted the workaround as an answer here.

Answer 1

OK, worked through this one in VSCode repo issues.

For now, until it's fixed, turn off ConPTY integration in the User Settings.

💥💥💥

Answer 2

The issue now says use legacy console. To change the setting open a cmd prompt. Right click the title to bring up properties.

Then Uncheck 'Use legacy console'