Fix terminal mouse coordinate issues

Fixes #34184

npm-shrinkwrap.json

@@ -574,7 +574,7 @@
     "xterm": {
       "version": "3.0.0",
       "from": "Tyriar/xterm.js#vscode-release/1.17",
-      "resolved": "git+https://github.com/Tyriar/xterm.js.git#851dff7253fc9718bb90f691fc79a7c3c542bcfa"
+      "resolved": "git+https://github.com/Tyriar/xterm.js.git#2d89a723a61c3b2aabb15bd278dc7792466b8ec5"
     },
     "yauzl": {
       "version": "2.8.0",

src/vs/workbench/parts/terminal/electron-browser/media/terminal.css

@@ -41,7 +41,10 @@
 	height: 100%;
 }
 
-.monaco-workbench .panel.integrated-terminal .xterm-viewport,
+.monaco-workbench .panel.integrated-terminal .xterm-viewport {
+	margin-right: -20px;
+}
+
 .monaco-workbench .panel.integrated-terminal canvas {
 	/* Align the viewport and canvases to the bottom of the panel */
 	position: absolute;
@@ -71,8 +74,9 @@
 }
 
 .monaco-workbench .panel.integrated-terminal .xterm {
-	position: relative;
-	height: 100%;
+	position: absolute;
+	bottom: 0;
+	left: 0;
 	user-select: none;
 }