Repro Steps

1. Open a workspace with Python files and a .venv in the workspace and an empty workspace settings.json
2. Observe that the status bar shows the .venv as the selected environment
3. Click the status bar and select a global interpreter from the dropdown

Expected Behavior
The interpreter switches to the selected global one, and the status bar updates accordingly.

Actual Behavior
The status bar still shows the venv as the selected environment

This does not repro before the changes in #1120
Root cause still needs investigation, but we may want to revert the changes in the meantime.