VSCode Python interactive terminal scroll wheel is broken and does not show new output correctly

Question

I have been using VSCode's interactive terminal for Python for a while and a recent version change seems to have broken the scroll wheel and output.

For example, when sending code from the file to the terminal it works as expected:

However, when entering new commands in the interactive terminal directly it clips the output

The scroll wheel to the right in the interactive terminal no longer scrolls although I can navigate through output cells using the arrow keys

I strongly suspect this is a settings issue but have not been able to find the right config.

Any help would be much appreciated!

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I have tried reinstalling, switching environments, and searching for others with a related problem although nothing has worked.