Does this issue occur when all extensions are disabled?: No

• VS Code Version: 1.96.2
• OS Version: Client = Macos 14.7, Remote = Linux 5.4

Steps to Reproduce:

1. Connect to remote ssh
2. Open a project with 20000+ .tsx files
3. Observe extreme slowness (5+ seconds to respond) with basic editor file actions: open file, save file, close file, etc.

Debugging notes:

1. when set typescript output to trace mode I see one watch event per file, e.g. [trace] <semantic> Event received: createFileWatcher (0). { "id": 364, "path": "/home/peter.elmers/fortesting/generated_tsx_project/src/Component10322.tsx" }
2. from reading code, looks like this hits the nonRecursiveWatcher which is nodejs: https://github.com/microsoft/vscode/blob/292d0bd51af8d7e107fa34b00955aceb7d9c03d5/src/vs/platform/files/node/watcher/watcher.ts/#L16-L17
3. all the watchers pile up and get sent to the nodejs watcher code, I believe that triggers a quadratic time loop in this function: https://github.com/microsoft/vscode/blob/292d0bd51af8d7e107fa34b00955aceb7d9c03d5/src/vs/platform/files/node/watcher/nodejs/nodejsWatcher.ts/#L45-L52

The issue seems to be that every time watchers change then we send in all of the watchers, so the watch code needs to loop through the list many times and find which ones to remove and which ones to keep. But this is just a cursory look.

cc @bpasero