vscode-python: Having relative paths in .code-workspace files for interpreter path setting doesn't work

Environment data

• VS Code version: 1.45.1
• Extension version (available under the Extensions sidebar): 2020.5.80290
• OS and version: Windows 7 Enterprise
• Python version (& distribution if applicable, e.g. Anaconda): 3.7.0
• Type of virtual environment used (N/A | venv | virtualenv | conda | …): venv
• Relevant/affected Python packages and their versions: n/a
• Relevant/affected Python-related VS Code extensions and their versions: n/a
• Jedi or Language Server? (i.e. what is "python.jediEnabled" set to; more info #3977): Language Server
• Value of the python.languageServer setting: Microsoft

Expected behaviour

{
  "python.pythonPath": "..\\.venv\\Scripts\\python.exe",
}

I expect this to be able to use a parent virtual environment as the editor’s environment. I also tried ${workspaceFolder}/../.venv. I am trying to use the multi-root workspace feature with a full-stack app scaffold I work with for maintainability in my editor experience.

Setting pythonPath in the .code-workspace also seems to have no effect.

Actual behaviour

I receive generic extension crash modals and a re-prompt to select my python environment. The crash was intermittent, but it always re-prompts for a python interpreter.

Steps to reproduce:

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

PowerShell MVP setup script:

#requires -Version 3
$PSDefaultParameterValues['Out-File:Encoding'] = 'utf8'

$root = "${PWD}\repro-example"

$niParams = @{
    Path     = "$root\src\server\.vscode", "$root\src\client"
    ItemType = 'Directory'
    Force    = $true
}
New-Item @niParams > $null

@'
{
  "folders": [
    {"path": "."},
    {"path": ".\\src\\server"},
    {"path": ".\\src\\client"}
  ]
}
'@ | Out-File -FilePath "$root\vscode.code-workspace"

@'
{
  "python.pythonPath": "..\\.venv\\Scripts\\python.exe",
  "python.jediEnabled": false,
}
'@ | Out-File -FilePath "$root\src\server\.vscode\settings.json"

'' | Out-File -FilePath "$root\src\server\__init__.py" -NoNewline

py.exe -3 -m venv "$root\.venv"

code.cmd "$root\vscode.code-workspace"

Logs

Starting Microsoft Python language server.
> c:\Users\maximilian\repos\repro-example\src\.venv\Scripts\python.exe c:\Users\maximilian\.vscode\extensions\ms-python.python-2020.5.80290\pythonFiles\pyvsc-run-isolated.py -c "import sys;print(sys.executable)"
> c:\Users\maximilian\repos\repro-example\src\.venv\Scripts\python.exe c:\Users\maximilian\.vscode\extensions\ms-python.python-2020.5.80290\pythonFiles\pyvsc-run-isolated.py -c "import sys;print(sys.executable)"
Diagnostic Code: InvalidPythonInterpreterDiagnostic, Message: No Python interpreter is selected. You need to select a Python interpreter to enable features such as IntelliSense, linting, and debugging.