System-wide ExecutionPolicy 'Bypass' setting causes host process crash

[daviwil]

Copied from vscode-powershell issue: PowerShell/vscode-powershell#119

Details from @ftischhauser:

When setting the execution policy to 'Bypass' using the machine policy, the PS host fails to start with the following error:

Unhandled Exception: System.Management.Automation.CmdletInvocationException: Windows PowerShell updated your execution policy successfully, but the setting is overridden by a policy defined at a more specific scope. Due to the override, your shell will retain its current effective execution policy of Bypass

To reproduce the issue you can set the following registry values:

[HKEY_LOCAL_MACHINE\SOFTWARE\Policies\Microsoft\Windows\PowerShell]
"EnableScripts"=dword:00000001
"ExecutionPolicy"="Bypass"

As this is the least restrictive setting the host should work just fine and catch this error.

Thanks for looking into this!

[daviwil]

Going to move this to a later release since we need to think about the best way to proceed when we can't set the execution policy level.

[daviwil]

This may be fixed already due to the way we load PowerShell now (always with -ExecutionPolicy Unrestricted at the command line). Will investigate later.