Ensure local terminals can launch before available profiles are ready

Fixes #132519
Fixes microsoft/vscode-remote-release#5556

src/vs/workbench/contrib/terminal/browser/terminalService.ts

@@ -1155,10 +1155,17 @@ export class TerminalService implements ITerminalService {
 
 
 	async createTerminal(options?: ICreateTerminalOptions): Promise<ITerminalInstance> {
-		const isPtyTerminal = options?.config && 'customPtyImplementation' in options.config;
-		if (!isPtyTerminal && !this._availableProfiles) {
-			await this._refreshAvailableProfilesNow();
+		// Await the initialization of available profiles as long as this is not a pty terminal or a
+		// local terminal in a remote workspace as profile won't be used in those cases and these
+		// terminals need to be launched before remote connections are established.
+		if (!this._availableProfiles) {
+			const isPtyTerminal = options?.config && 'customPtyImplementation' in options.config;
+			const isLocalInRemoteTerminal = this._remoteAgentService.getConnection() && URI.isUri(options?.cwd) && options?.cwd.scheme === Schemas.vscodeFileResource;
+			if (!isPtyTerminal && !isLocalInRemoteTerminal) {
+				await this._refreshAvailableProfilesNow();
+			}
 		}
+
 		const config = options?.config || this._availableProfiles?.find(p => p.profileName === this._defaultProfileName);
 		const shellLaunchConfig = config && 'extensionIdentifier' in config ? {} : this._convertProfileToShellLaunchConfig(config || {});