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Even if you know git, you wouldn’t assume that “discard all changes” affects untracked files. It’s bad design all around
That depends on what you map “discard” to in your mental model. Whoever designed the VSCode feature chose to associate it with reset+clean, rather than just reset. Presumably that’s why they called the menu option “discard” rather than “reset”. (But I agree that this is a surprising choice, and that they managed to make an already-famously-bad UX even worse.)
