--diff does not work with WSL. Fixes #83473

src/vs/code/node/paths.ts

@@ -25,9 +25,6 @@ export function validatePaths(args: ParsedArgs): ParsedArgs {
 		args._ = paths;
 	}
 
-	// Update environment
-	args.diff = args.diff && args._.length === 2;
-
 	return args;
 }
 

src/vs/platform/windows/electron-main/windowsMainService.ts

@@ -496,7 +496,7 @@ export class WindowsMainService extends Disposable implements IWindowsMainServic
 
 		// Remember in recent document list (unless this opens for extension development)
 		// Also do not add paths when files are opened for diffing, only if opened individually
-		if (!usedWindows.some(window => window.isExtensionDevelopmentHost) && !openConfig.diffMode && !openConfig.noRecentEntry) {
+		if (!usedWindows.some(window => window.isExtensionDevelopmentHost) && !(fileInputs?.filesToDiff) && !openConfig.noRecentEntry) {
 			const recents: IRecent[] = [];
 			for (let pathToOpen of pathsToOpen) {
 				if (pathToOpen.workspace) {