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

• VS Code Version: 1.87.1
• OS Version:

Steps to Reproduce:

1. Enable the vs-seti icon theme
2. Create a terminal with the createTerminal function from the VS Code API, setting the iconPath to a file.
3. Move the terminal into the editor area

Example:

The extension defined fileIcon () is overlapping with the editor icon ().