Why does Ctrl + Shift + C no longer open a new external terminal in VS Code?

Here is proof my VS Code is configured to accept <kbd>Ctrl + Shift + C</kbd> to open a new external terminal:

Here is proof that nothing overwrites the hotkey in VS Code:

The hotkey still fails if I rebind it to <kbd>Ctrl + Shift + X</kbd>

<kbd>Ctrl + Shift + Q</kbd> still opens an Ubuntu terminal at root. I suspect VS Code registers the hotkey but Ubuntu doesn't let it open a terminal. Example: <kbd>Ctrl + Shift + L</kbd> still selects a whole line. <kbd>Ctrl + ~</kbd> still opens.

Yet I also changed nothing about this deliberately: it worked 2 weeks ago. I could reinstall my entire OS and everything from scratch, but I don't want to do that.

My is terminal.external.linuxExec setting is set to x-terminal-emulator. The issue also reproduces if I change it to gnome-terminal. <kbd>ctrl+shift+c</kbd> works when bound to a different command like cursorDown. I'm on Ubuntu 22.04.2 LTS.

I use this hotkey every day, so the fact that it doesn't work now is costly for my productivity. To not fix it means that every time I want a new terminal in my current project, I have to: open a new terminal at root and then type /code/subfolder/projectName.

This is a bug. See Open New External Terminal Not Work (Ubuntu Linux)
#179958. Since the command itself is not working, by extension, no keyboard shortcut that you bind to it will work. The issue ticket is still in a triage state, but given that both you and I can reproduce this, I'm pretty confident in its bug-ness. I'll update this post once the fix is made. You can give the issue ticket a thumbs up to show support for it.

The bug seems to be specific to Ubuntu / Linux. It doesn't reproduce for me on my Windows 11 machine, and it doesn't reproduce for one of the VS Code maintainers on their macOS machine.

And most (all?) people who shared version info there had VS Code installed as a Snap. Apparently if you install it as a deb package, this is not an issue, so if you don't mind that, you can take that route as a solution.

For your reference / learning purposes, I found this by googling "github vscode issues open new external terminal not working linux OR ubuntu".

A good way to debug keyboard shortcut issues is how I showed you in the comments: Try the command itself that the keyboard shortcut is bound to. Then you can see if the issue is with the invocation command itself. And try binding the keyboard shortcut to a simpler command, such as cursorDown, which allows you to see if there is anything interfering with VS Code picking up the shortcut, such as a system-level keyboard shortcut. See also the official keybinding troubleshooting wiki.