Issue Type: Bug

1. Create workspace file

{
    "folders": [
        {
            "name": "scripts",
            "path": "."
        },
        {
            "name": "other",
            "path": ".//other"
        },
    ],
    "settings": {
        "terminal.integrated.cwd": "${workspaceFolder}",
    }
}

Create the other folder.
2. Open it in Visual Studio Code on Windows
3. Terminal \ New Terminal, select 'scripts'
4. Observe error:
The terminal process failed to launch: Starting directory (cwd) "D:\sources\app\scripts\D:\sources\app\scripts" does not exist.

VS Code version: Code - Insiders 1.62.0-insider (ff1e16e, 2021-10-29T05:16:23.014Z)
OS version: Windows_NT x64 10.0.19043
Restricted Mode: No