[WIP] Fix notebook execution hang issue with ipykernel 7

[Copilot]

Thanks for asking me to work on this. I will get started on it and keep this PR's description up to date as I form a plan and make progress.

---

This section details on the original issue you should resolve

<issue_title>ipykernel 7 causes notebook execution to hang</issue_title>
<issue_description>

Environment data

• VS Code version: 1.107.1
• Jupyter Extension version (available under the Extensions sidebar): 2025.9.1
• Python Extension version (available under the Extensions sidebar): 3.11.11
• OS (Windows | Mac | Linux distro) and version: Windows 11 25H2 1000.26100.265.0
• Python and/or Anaconda version: 25.11.1
• Type of virtual environment used (N/A | venv | virtualenv | conda | ...): conda
• Jupyter server running: Local | Remote | N/A WSL Ubuntu-22.04

Expected behaviour

Can run normally when running code blocks

Actual behaviour

When running a code block, the kernel hangs, interrupt and rerun will also hang, and replacing the kernel will also hang. Only restarting the kernel and rerun will work properly, but after a few hours, it may also hang after hibernation and rerun.Sometimes I click to restart the kernel, but it keeps getting stuck in the loading state

Steps to reproduce:

[NOTE: Self-contained, minimal reproducing code samples are extremely helpful and will expedite addressing your issue]

run code

Logs

Output for Jupyter in the Output panel (View→Output, change the drop-down the upper-right of the Output panel to Jupyter)

XXX

<agent_instructions>Find the root cause</agent_instructions>

Comments on the Issue (you are @copilot in this section)

@DonJayamanne Please could you enable logging as follows: * Open settings & go into `Jupyter->Logging` * Change the value to `trace` * Reload VS Code, * Attempt to repro the issue & then copy the output from the `Jupyter` output panel (use the command `Jupyter: Show Output` to get to the logs). @DonJayamanne Please can you * Determine version of ipykernel, ensure you have the latest version of ipykernel installed * please try running a single cell `print("Hello World")` * If this issue repros, then please share the full logs @DonJayamanne I'm sorry you're running into this issue, please can someone share a very simple repro * Create a virtual environment `python -m venv .venv` * Install python packages (please share a pip file or the like) * Please keep the list of packages to install to a minimum of three, ipykernel, x & y * A simple block of code, just one cell

I know everyone here might be using realworld code with lots of packages.
However i would like it if someone could replicate this with a single package or no new packages, but just IPykernel and some very very simple Python code (few lines) as opposed to a couple of cells

Asking for this as getting a complex setup makes it very difficult to isolate the issue and track it down.

[ZupoLlask]

This upstream issue is probably relevant: ipython/ipykernel#1469