skip PWD and see what I get

src/client/interpreter/activation/service.ts

@@ -180,6 +180,8 @@ export class EnvironmentActivationService implements IEnvironmentActivationServi
 
     @cache(-1, true)
     public async getProcessEnvironmentVariables(resource: Resource, shell?: string): Promise<EnvironmentVariables> {
+        // Shell mightve been not gitbash.. Hence messed up path.. lol
+
         // Try to get the process environment variables using Python by printing variables, that can be little different
         // from `process.env` and is preferred when calculating diff.
         const globalInterpreters = this.interpreterService

src/client/terminals/envCollectionActivation/service.ts

@@ -243,6 +243,7 @@ export class TerminalEnvVarCollectionService implements IExtensionActivationServ
                         envVarCollection.prepend(key, value, defaultPrependOptions);
                         return;
                     }
+                    // Avoid setting PWD.
                     if (key === 'PATH') {
                         // perhaps PATH is getting messed up
                         const options = {
@@ -482,6 +483,7 @@ function shouldSkip(env: string) {
         'PYTHONUTF8',
         // We have deactivate service which takes care of setting it.
         '_OLD_VIRTUAL_PATH',
+        'PWD',
     ].includes(env);
 }