tsserver is acting strangely on VS Code Remote-WSL (WSL2)

[Tyriar]

TypeScript Version: 3.6.3 (3.7.1-rc seems to have the same issues)

Version: 1.40.0-insider (user setup)
Commit: a14de79ac74f2e0e6566d3cc9410eeb7dc769cde
Date: 2019-11-02T00:39:42.595Z
Electron: 6.1.2
Chrome: 76.0.3809.146
Node.js: 12.4.0
V8: 7.6.303.31-electron.0
OS: Windows_NT x64 10.0.19013

In my https://github.com/Tyriar/xterm.js workspace tsserver is having a bunch of issues this morning on a WSL2 Debian remote connection:

Console:

tsserver.log

[Tyriar]

Also tsc -b -w ... seems to work fine in the terminal of the same window

[Tyriar]

cc @mjbvz

[sheetalkamat]

Does this still repro? If yes, does #35615 (comment) help?

[Tyriar]

Haven't seem this since