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[ARTICLE · art-43682] src=infoworld.com ↗ pub= topic=developer-tools verified=true sentiment=· neutral

Visual Studio Code introduces restricted mode for untrusted folders

Microsoft's Visual Studio Code version 1.126 introduces a restricted mode for untrusted folders to prevent automatic code execution, allowing developers to browse code safely before deciding to trust the folder. The update also adds total cost display for chat sessions and multi-chat management in agent host sessions.

read1 min views1 publishedJun 29, 2026

Microsoft’s Visual Studio Code editor has reached version 1.126, which is highlighted by a new security mode for untrusted code. Also with the new release, VS Code now displays total cost for chat sessions (instead of just for individual turns) and allows users to manage multiple chats side-by-side in a single agent host session.

Published June 24, VS Code 1.26 can be downloaded from code.visualstudio.com. VS Code 1.26 introduces a new security enhancement, Workspace Trust, that lets users decide whether project folders can automatically run code and adds a layer of security when working with unfamiliar code. Previously, opening a new folder immediately raised a dialog asking the user whether to trust the folder before they could look at its contents. Now, new folders open in Restricted Mode to prevent automatic code execution. Developers can browse the code safely first and then choose whether to trust the folder.

Simplified model hovering also is featured in VS Code 1.126. The model hover now shows a one-word descriptor of the model’s capabilities and includes deep link buttons that take a user directly to the relevant configuration.

In an enhancement to the Agents window, the dedicated companion window for exploring agent sessions across projects and machines, a Copilot session started from an agent host now can hold several chats at once. Because the chats share the same session and working context, users can keep more than one conversation going in the same workspace at the same time.

VS Code 1.126 joins what is now a weekly update release schedule for the editor, which began in March. Recent versions of VS Code, emphasizing capabilities such as AI and agents, have included the following:

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