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Integrated terminal in visual studio code is opening externally and not internally

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I have reinstalled Visual Studio Code and for some reason, when I do the Ctrl+Shift+` shortcut, instead of opening a terminal window inside VS Code, it's opening an external command window, which is very annoying.

Anyone knows what setting it is to get it back internally?

I tried File->Preferences->Settings->Terminal and then set the first option "Customizes what kind of terminal to launch." to integrated.

Is there any other setting I need to set?


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