Unnecessary large screen update under Remote Desktop

[xinyanmsft]

Does this issue occur when all extensions are disabled?: Yes/No

• VS Code Version: 1.72.2
• OS Version: Windows 11, 22H2

We (Microsoft DevBox service, https://azure.microsoft.com/en-us/products/dev-box) found this issue while performing test with Remote Desktop team. We found out for simple text edit scenarios, VSCode made larger screen update than necessary. This means Remote Desktop needs to encode and decode a much larger area than necessary, introducing additional input latency (the time betweeon one types a character and when one sees the UI update).

The test scenario:

1. Create a new txt file with VSCode, and type some text such as "hello world".
2. Set the cursor to the end of the line.
3. Press 'Enter'

When running this scenario under remote desktop with internal tooling to track screen update, we found when the 'Enter' key is pressed, VSCode made unnecessary large screen area update. With the attached screenshot, the update area is (left 421, top 108, right 2560, bottom 1381), about the size of the entire editor. Ideally only the area around the text and the scroll bar should be updated.

Attach screenshot. I expect only the yellow rectangles are updated, but the entire editor was updated.

The tool to track UI update area is internal, and I can't post it here. Please contact me (xinyan @ microsoft.com) for tool's location and instruction. Thanks!