Typescript 'rootDir' error

[m-hall]

Typescript is showing a large number of rootDir errors, both in the Problems panel, and the inline
Does not happen when running tsc from the command line.

Appears to be a re-introduction of microsoft/vscode#117732

Insiders build has the issue.

Does this issue occur when all extensions are disabled?: Yes

• VS Code Version: 1.114.0, 1.115.0, 1.116.0-insider
• OS Version: MacOS 26.4

Downgrading to 1.113.0 fixes the issue for me.

Steps to Reproduce:

1. Large monorepo with multiple packages, and multiple tsconfigs

Example TSConfig(s)

{
  "extends": "@org/app-config",
  "include": [
    "**/*",
    "../../../packages/config/types.d.ts",
    "../../../packages/app-common/types/**/*.d.ts"
  ],
  "compilerOptions": {
    "outDir": ".tsoutput",
    "baseUrl": "./",
    "paths": {
      "~app/*": ["./*"],
      "@org/app-*": ["../../../packages/*"]
    }
  }
}

extended from

{
  "extends": "@react-native/typescript-config",
  "include": ["**/*", "./types.d.ts"],
  "exclude": ["**/.*/", "**/node_modules", "**/Pods/**"],
  "compilerOptions": {
    "lib": [
      "es2019",
      "es2020.bigint",
      "es2020.date",
      "es2020.number",
      "es2020.promise",
      "es2020.string",
      "es2020.symbol.wellknown",
      "es2021.promise",
      "es2021.string",
      "es2021.weakref",
      "es2022.array",
      "es2022.object",
      "es2022.string",
      "ES2023.Array",
      "dom",
      "dom.iterable"
    ],
    "types": ["react-native", "node"],
    "module": "esnext"
  }
}