vscode: [Settings Sync] Cannot resolve merge conflicts

Issue Type: Bug

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GIF

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Steps

I’m using the stable build so this was my first attempt on the Settings Sync feature.

1. I turned on Settings Sync on my desktop PC. ✓
2. I opened my laptop and turned on Settings Sync, and then selected “Manually merge” then I got 5 merge conflicts to resolve. ✓
3. When I opened the third file markdown.json for the first time, I saw it was empty in the left tab (i.e. Remote tab) and there was one snippet in the right tab.
4. So I clicked “Merge” button and deleted the snippet in the right tab.
5. Then I clicked “Accept Merge” and saw an error similar to that in above GIF.
6. I could not proceed but only cancelled Settings Sync. Now as a result, if I try to turn on Settings Sync, both sides of markdown.json are empty and there is no way to resolve the conflict(?).

(Now both sides of python.json are also empty. I didn’t touch it on my first attempt. But they shouldn’t be empty to my memory, no matter “Local” or “Remote”.)

Looks to be similar to #104622, although here it is about snippets (not keybinding) and my snippet files are not empty.

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VS Code version: Code 1.48.0 (db40434f562994116e5b21c24015a2e40b2504e6, 2020-08-13T07:50:42.600Z) OS version: Windows_NT x64 10.0.18363

System Info

Item	Value
CPUs	Intel® Core™ i5-6200U CPU @ 2.30GHz (4 x 2400)
GPU Status	2d_canvas: enabled flash_3d: enabled flash_stage3d: enabled flash_stage3d_baseline: enabled gpu_compositing: enabled multiple_raster_threads: enabled_on oop_rasterization: disabled_off protected_video_decode: unavailable_off rasterization: enabled skia_renderer: disabled_off_ok video_decode: enabled viz_display_compositor: enabled_on viz_hit_test_surface_layer: disabled_off_ok webgl: enabled webgl2: enabled
Load (avg)	undefined
Memory (System)	7.90GB (4.06GB free)
Process Argv
Screen Reader	no
VM	0%

Extensions (21)

Extension	Author (truncated)	Version
spellright	ban	3.0.52
log-wrapper-for-vscode	chr	1.0.2
vsc-material-theme-icons	equ	1.2.0
prettier-vscode	esb	5.1.3
vscode-highlight	fab	1.4.1
vscode-open-in-application	fab	1.0.5
latex-workshop	Jam	8.11.1
regexp-preview	Lou	0.1.5
git-graph	mhu	1.25.0
python	ms-	2020.8.101144
vscode-pylance	ms-	2020.8.1
remote-ssh	ms-	0.51.0
remote-ssh-edit	ms-	0.51.0
vscode-sort-json	ric	1.18.0
LiveServer	rit	5.6.1
code-settings-sync	Sha	3.4.3
numbermonger	sof	0.5.0
gitmoji-vscode	Vtr	0.2.1
dictionary-completion	yzh	0.9.2
find-word-at-cursor	yzh	0.1.1
markdown-all-in-one	yzh	3.2.0

(1 theme extensions excluded)