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

• VS Code Version:
• OS Version:

Version: 1.93.1 (Universal)
Commit: 38c31bc
Date: 2024-09-11T17:20:05.685Z
Electron: 30.4.0
ElectronBuildId: 10073054
Chromium: 124.0.6367.243
Node.js: 20.15.1
V8: 12.4.254.20-electron.0
OS: Darwin arm64 23.6.0

As an extension author, diagnostics undergo unexpected formatting specifically in the problems pane. In the screenshot, you can see what should be a graphql query with various levels of indentation with all of its leading whitespace collapsed. This issue isn't limited to only leading whitespace though - it seems like any whitespace per line is collapsed down to a single space.

Steps to Reproduce:

1. Clone https://github.com/trevor-scheer/vscode-repro-whitespace
2. Run extension with F5
3. Open sample file sample-demo.rs
4. Open problems pane
5. Observe malformed diagnostic with collapsed whitespace
   (Side note: the whitespace is even preserved in the tooltip when you hover over the problem)