Does this issue occur when all extensions are disabled?: Yes/No

• VS Code Version: 1.88.0
• OS Version: Ubuntu20

Steps to Reproduce:

1. install a extension in local, like redhat.vscode-xml
2. connect to a host server
3. create a extension
4. add the code vscode.commands.executeCommand<void>('workbench.extensions.installExtension', 'redhat.vscode-xml') ( or formulahendry.code-runner and other extensionId )
5. throw a error ''Extension 'redhat.vscode-xml' not found."

Maybe it has something to do with this line of code
https://github.com/microsoft/vscode/pull/206381/files#r1560396265