Reproduction steps

1. Start Zed
2. Make sure the luau extension is installed
3. Use settings below
4. Make a .luau file
5. Put:

--!strict
type foo = { a: string } | { b: number }
local foo: foo = { c = {} }

Current vs. Expected behavior

Current behavior

The error message contains spaces that become code block in Markdown, but those don't need the escape characters Zed inserts and Zed does not take this into account when doing markdown escape.

Expected behavior

No markdown escapes, like in the image below taken in vscode.

Zed version and system specs

Zed: v0.227.1+stable.199.9f9b707d39d62468d4cdaed2d8eb95a847da4cf9 (Zed)
OS: macOS 26.1
Memory: 18 GiB
Architecture: aarch64

Attach Zed log file

Relevant Zed settings

{
  "lsp": {
    "luau-lsp": {
      "settings": {
        "fflags": {
          "enable_new_solver": true,
        },
      },
    },
  },
}

Relevant Keymap

(for AI issues) Model provider details

No response

If you are using WSL on Windows, what flavor of Linux are you using?

None