Environment data

• VS Code version: 1.40.1
• Extension version (available under the Extensions sidebar): 2019.11.49689
• OS and version: MacOS Catalina 10.15.1
• Python version (& distribution if applicable, e.g. Anaconda): 3.7.4
• Type of virtual environment used (N/A | venv | virtualenv | conda | ...): virtualenv
• Relevant/affected Python packages and their versions: pytest==5.3.0
• Jedi or Language Server? (i.e. what is "python.jediEnabled" set to; more info How to update the language server to the latest stable version #3977): Jedi

Expected behaviour

Tests are displayed in the test explorer according to python.testing.cwd setting and I am able to run single test or tests from single file

Actual behaviour

python.testing.cwd is ignored for displaying tests and I am unable to run single test or tests from single file because I am getting an error file not found.

Steps to reproduce:

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

Sample project: https://github.com/pbotsman/sample_project

1. Open project
2. Open tests/py/some_test.py to start exploring tests
3. Try to execute single test test_something or tests in some_test.py file.
4. Get the error ERROR: file not found: ./tests/py/some_test.py::test_something
   (Sometimes in order to reproduce the problem I had to relaunch my VSCode)

Logs

Output for Python in the Output panel (View→Output, change the drop-down the upper-right of the Output panel to Python)

> ~/.virtualenvs/sample_project/bin/python -m pytest --rootdir ~/projects/sample_project --junitxml=/var/folders/0_/6w94lk1171vc_fpwbjqx02nw0000gn/T/tmp-4746yxdv7Lw3muwB.xml -v -s --log-cli-level INFO ./tests/py/some_test.py::test_something
cwd: ~/projects/sample_project/tests/py

Output from Console under the Developer Tools panel (toggle Developer Tools on under Help; turn on source maps to make any tracebacks be useful by running Enable source map support for extension debugging)

console.ts:137 [Extension Host] Info Python Extension: 2019-11-20 14:06:31: getActivatedEnvironmentVariables, Class name = b, completed in 1ms, Arg 1: <Uri:/Users/pavel/projects/sample_project>, Arg 2: undefined, Arg 3: undefined
console.ts:137 [Extension Host] Info Python Extension: 2019-11-20 14:06:31: > ~/.virtualenvs/sample_project/bin/python -m pytest --rootdir ~/projects/sample_project --junitxml=/var/folders/0_/6w94lk1171vc_fpwbjqx02nw0000gn/T/tmp-5598WI4lpp4kFEsC.xml -v -s --log-cli-level INFO ./tests/py/some_test.py::test_something
console.ts:137 [Extension Host] Info Python Extension: 2019-11-20 14:06:31: cwd: ~/projects/sample_project/tests/py

Additional info

Looks like something has changed in the last release:

1. Previously tests would be displayed in the test explorer just as some_test.py would be root test. I mean that tests/py would be omitted in the test explorer since I have "python.testing.cwd": "tests/py" in my settings.
   Currently directories tests/py are displayed in the test explorer even though I have this setting.
2. I can't run single test because I am always getting an error file not found. It looks like something is wrong with the file paths.
   When the command
   ~/.virtualenvs/sample_project/bin/python -m pytest --rootdir ~/projects/sample_project --junitxml=/var/folders/0_/6w94lk1171vc_fpwbjqx02nw0000gn/T/tmp-5598WI4lpp4kFEsC.xml -v -s --log-cli-level INFO ./tests/py/some_test.py::test_something
   is called my current working directory is set to python.testing.cwd and that is why I am getting the error.
   So in the command mentioned above valid file path should be ./some_test.py::test_something, not ./tests/py/some_test.py::test_something.