diff --git a/src/vs/workbench/contrib/files/browser/fileActions.ts b/src/vs/workbench/contrib/files/browser/fileActions.ts
index cf5f62d2ad55763d9255c50d2416be5850620a24..f55a407d1e264aaec33eeb1d14da97a36dcaef20 100644
--- a/src/vs/workbench/contrib/files/browser/fileActions.ts
+++ b/src/vs/workbench/contrib/files/browser/fileActions.ts
@@ -743,11 +743,6 @@ export class CollapseExplorerView extends Action {
 		const explorerView = explorerViewlet.getExplorerView();
 		if (explorerView) {
 			explorerView.collapseAll();
-			// If there is something being edited via input box make sure to close it #96198
-			const editable = this.explorerService.getEditable();
-			if (editable) {
-				await this.explorerService.setEditable(editable.stat, null);
-			}
 		}
 	}
 }
diff --git a/src/vs/workbench/contrib/files/browser/views/explorerView.ts b/src/vs/workbench/contrib/files/browser/views/explorerView.ts
index 415ed743c71f82f9bf0ef06ae817a3e2830bd400..59395768db78c2894bb65bae2f5ffa666fc660ad 100644
--- a/src/vs/workbench/contrib/files/browser/views/explorerView.ts
+++ b/src/vs/workbench/contrib/files/browser/views/explorerView.ts
@@ -311,19 +311,13 @@ export class ExplorerView extends ViewPane {
 	}
 
 	async setEditable(stat: ExplorerItem, isEditing: boolean): Promise<void> {
-		let shouldRefresh = true;
 		if (isEditing) {
-			if (stat.parent && stat.parent !== this.tree.getInput()) {
-				shouldRefresh = stat.parent.isDirectoryResolved;
-				await this.tree.expand(stat.parent);
-			}
+			await this.tree.expand(stat.parent!);
 		} else {
 			DOM.removeClass(this.treeContainer, 'highlight');
 		}
 
-		if (shouldRefresh) {
-			await this.refresh(false, stat.parent);
-		}
+		await this.refresh(false, stat.parent, false);
 
 		if (isEditing) {
 			DOM.addClass(this.treeContainer, 'highlight');
@@ -558,14 +552,14 @@ export class ExplorerView extends ViewPane {
 	 * Refresh the contents of the explorer to get up to date data from the disk about the file structure.
 	 * If the item is passed we refresh only that level of the tree, otherwise we do a full refresh.
 	 */
-	refresh(recursive: boolean, item?: ExplorerItem): Promise<void> {
+	refresh(recursive: boolean, item?: ExplorerItem, cancelEditing: boolean = true): Promise<void> {
 		if (!this.tree || !this.isBodyVisible() || (item && !this.tree.hasNode(item))) {
 			// Tree node doesn't exist yet
 			this.shouldRefresh = true;
 			return Promise.resolve(undefined);
 		}
 
-		if (this.explorerService.isEditable(undefined)) {
+		if (cancelEditing && this.explorerService.isEditable(undefined)) {
 			this.tree.domFocus();
 		}
 
@@ -709,6 +703,10 @@ export class ExplorerView extends ViewPane {
 	}
 
 	collapseAll(): void {
+		if (this.explorerService.isEditable(undefined)) {
+			this.tree.domFocus();
+		}
+
 		const treeInput = this.tree.getInput();
 		if (Array.isArray(treeInput)) {
 			if (hasExpandedRootChild(this.tree, treeInput)) {
diff --git a/src/vs/workbench/contrib/files/browser/views/explorerViewer.ts b/src/vs/workbench/contrib/files/browser/views/explorerViewer.ts
index f2f985c8bef6c6745f476e7e0546afe62d4d0fd5..79836599b9e613f0383704e7d7706bd3714a00f2 100644
--- a/src/vs/workbench/contrib/files/browser/views/explorerViewer.ts
+++ b/src/vs/workbench/contrib/files/browser/views/explorerViewer.ts
@@ -445,15 +445,12 @@ export class FilesRenderer implements ICompressibleTreeRenderer<ExplorerItem, Fu
 			DOM.addStandardDisposableListener(inputBox.inputElement, DOM.EventType.KEY_UP, (e: IKeyboardEvent) => {
 				showInputBoxNotification();
 			}),
+			DOM.addDisposableListener(inputBox.inputElement, DOM.EventType.BLUR, () => {
+				done(inputBox.isInputValid(), true);
+			}),
 			label,
 			styler
 		];
-		setTimeout(() => {
-			// Do not react immediatly on blur events due to tree refresh potentially causing an early blur #96566
-			toDispose.push(DOM.addDisposableListener(inputBox.inputElement, DOM.EventType.BLUR, () => {
-				done(inputBox.isInputValid(), true);
-			}));
-		}, 100);
 
 		return toDisposable(() => {
 			done(false, false);