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

• VS Code Version: 1.63.2
• OS Version: Windows 11

Steps to Reproduce:

1. Start VS code without extensions :
   code-insiders --disable-extensions
2. Create new terminal in editor :
   CTRL+SHIFT+P -> Terminal:Create New Terminal in Editor area to the side.
3. Close vs code by clicking on 'x' button on app top right of the WIndow.
4. Re-open vs code, see that the terminal in editor area is not restored.

Notes:

1. Persistent sessions value set
   "terminal.integrated.persistentSessionReviveProcess": "onExitAndWindowClose"
2. No issues with the terminals in panel area. Terminal are restored correctly when vs code is restarted. Issue only with terminals opened in editor area,