defaultInterpreterPath doesn't resolve ${workspaceFolder}

[ernstp]

Type: Bug

Behaviour

Default interpreter path '${workspaceFolder}/.venv/bin/python' could not be resolved: Path contains unresolved variables

Steps to reproduce:

Read instructions at https://code.visualstudio.com/docs/python/settings-reference and follow them for python.defaultInterpreterPath

Set:
"python.defaultInterpreterPath": "${workspaceFolder}/.venv/bin/python"

In:
$HOME/.config/Code/User/settings.json

What I want to achieve is that when I go to a new project for the first time, it should default to the local .venv for that project.

Diagnostic data

Default interpreter path '${workspaceFolder}/.venv/bin/python' could not be resolved: Path contains unresolved variables

Extension version: 2026.4.0
VS Code version: Code 1.111.0 (ce099c1ed25d9eb3076c11e4a280f3eb52b4fbeb, 2026-03-06T23:06:10Z)
OS version: Linux x64 6.19.0-9-generic
Modes:

• Python version (& distribution if applicable, e.g. Anaconda): 3.12.12
• Type of virtual environment used (e.g. conda, venv, virtualenv, etc.): Venv
• Value of the python.languageServer setting: Default

User Settings

languageServer: "Pylance"

testing
• pytestEnabled: true

Installed Extensions

Extension Name	Extension Id	Version
bash-ide-vscode	mad	1.43.0
cpp-devtools	ms-	0.3.6
cpptools	ms-	1.30.5
debugpy	ms-	2025.18.0
js-debug	ms-	1.110.0
js-debug-companion	ms-	1.1.3
python	ms-	2026.4.0
ruff	cha	2026.36.0
rust-analyzer	rus	0.3.2828
vscode-js-profile-table	ms-	1.0.10
vscode-pylance	ms-	2026.1.1
vscode-python-envs	ms-	1.22.0
yocto-bitbake	yoc	2.8.0

[eleanorjboyd]

I think this is the fix you are looking for- will review microsoft/vscode-python-environments#1334