Also reproduced on the current nightlies with the app-recommended setup (desktop app paired to the background service on the same machine, local environment off for the same reason described in step 2).
Version or commit: desktop app 0.1.8-nightly.20261106.4288 (AppImage), server 0.1.8-nightly.20261105.4205 (systemd user service managed by the desktop app)
Environment: Arch Linux, Hyprland (Wayland), x64
Details: Same dead end, one surface apart from the "Open in" file menu: on the new-thread screen for a local project, the environment dropdown's "Open in VS Code" row is rendered disabled and clicking it does nothing — no toast, no action. Same as this report, editor discovery itself works (the row is named after VS Code), and the asymmetry is identical: threads on the SSH-linked server on other machines open VS Code fine over vscode://vscode-remote/ssh-remote+...; only same-machine threads dead-end.
Machine checks that all pass, so this is not an environment-discovery problem:
coderesolves at/usr/bin/code(visual-studio-code-bin 1.145.1), which is inside the service's PATHxdg-mime query default x-scheme-handler/vscode→com.microsoft.VSCode.UrlHandler.desktop- the service inherits
WAYLAND_DISPLAY/DISPLAYfrom the systemd user manager, so the graphical launch path is available
Could not check: I have not run PR #31358 end to end, but my setup looks exactly like its test scenario (app and service share the same ~/.t3 home, so the environment-id match should hold). Happy to be a real-world test case for it if useful.