From ce070d36f189c7fd41b65016b31cb5bd5278f6ff Mon Sep 17 00:00:00 2001
From: Kartik Raj <karraj@microsoft.com>
Date: Thu, 12 Oct 2023 18:09:24 -0700
Subject: [PATCH] Skip setting `PYTHONUTF8` when activating terminals

---
 .../activation/terminalEnvVarCollectionService.ts          | 7 ++++++-
 1 file changed, 6 insertions(+), 1 deletion(-)

diff --git a/src/client/interpreter/activation/terminalEnvVarCollectionService.ts b/src/client/interpreter/activation/terminalEnvVarCollectionService.ts
index c11ec221d4d7..a13786a83218 100644
--- a/src/client/interpreter/activation/terminalEnvVarCollectionService.ts
+++ b/src/client/interpreter/activation/terminalEnvVarCollectionService.ts
@@ -394,7 +394,12 @@ function shouldPS1BeSet(type: PythonEnvType | undefined, env: EnvironmentVariabl
 }
 
 function shouldSkip(env: string) {
-    return ['_', 'SHLVL'].includes(env);
+    return [
+        '_',
+        'SHLVL',
+        // Even though this maybe returned, setting it can result in output encoding errors
+        'PYTHONUTF8'
+    ].includes(env);
 }
 
 function getPromptForEnv(interpreter: PythonEnvironment | undefined) {