Jupyter Notebook syntax highlighting breaks for multiroot workspace when root is added

[Real-Gecko]

Does this issue occur when all extensions are disabled?: Yes, except Python and 'Jupyter'

• VS Code Version: 1.95.3
• OS Version: Arch Linux

Steps to Reproduce:

1. Clone following repo https://github.com/Real-Gecko/vscode-jupyter-bug
2. Open testing.code-workspace in VSCode
3. With Explorer open dir1/.jupyter/testing.ipynb
4. Note that syntax highlighting and code analysis is completely broken, despite cell execution is successful
   
5. Open testing.code-workspace in editor and comment out this section

        {
            "path": ".",
            "name": "root"
        }

6. Restart VSCode and reopen notebook, now syntax highlighting works.
7. So, it only happens when workspace root folder(one with .code-workpsace file) exist in list of folders

[rchiodo]

Thanks for logging an issue. It looks like pylance is crashing or is not being started for some reason.

Can you include the output as described here?
https://github.com/microsoft/pylance-release/blob/main/TROUBLESHOOTING.md#filing-an-issue

[Real-Gecko]

Added

    "settings": {
        "python.analysis.logLevel": "Trace"
    }

to .code-workspace, here's the result
pylance.trace.log

[rchiodo]

Thanks, I can reproduce the problem. The workspace folders being inside one another is messing up the import paths for some reason.

[Real-Gecko]

By the way, if I just open folder(root one) everything works as expected, only if I open .code-workspace syntax highlighting breaks, might be important detail.