• VSCode Version:

Version: 1.37.1 (user setup)
Commit: f06011ac164ae4dc8e753a3fe7f9549844d15e35
Date: 2019-08-15T16:17:55.855Z
Electron: 4.2.7
Chrome: 69.0.3497.128
Node.js: 10.11.0
V8: 6.9.427.31-electron.0
OS: Windows_NT x64 10.0.18362

• OS Version: Microsoft Windows [Version 10.0.18362.295]

Steps to Reproduce:

1. Follow "Variables resolved in settings" guide (from release notes) and set: "terminal.integrated.cwd": "${fileDirname}"
2. Press CTRL+N (New File)
3. Press CTRL+<backtick> (View: Toggle Integrated Terminal)
4. Observer error: The terminal shell CWD "${fileDirname}" does not exist

Expected behaviour:

If the path does not exist, fallback to default ${workspaceFolder} / ${workspaceRoot} location?

Does this issue occur when all extensions are disabled?: Yes