Incorrect terminal tab title when cwd contains non-ascii characters

[JLHwung]

Does this issue occur when all extensions are disabled?: Yes

• VS Code Version: Version: 1.74.2 (e8a3071)
• OS Version: Darwin Kernel Version 22.2.0: Fri Nov 11 02:03:51 PST 2022; root:xnu-8792.61.2~4/RELEASE_ARM64_T6000 arm64
• Tried search terms: non-ascii, unicode, cwd, terminal

Steps to Reproduce:

1. Create a new folder named "文件" and open with VS code

mkdir 文件
code 文件

2. Click "Terminal" -> "New Terminal"
3. Observe the terminal tab list.

Current:

The tab title is printed as zsh - �件

Expected: zsh. Here the shell is open from the same folder as cwd, but VSCode incorrectly handles non-ascii cwd names and the UI thought the shell is launched from a different folder.

Since the cwd of the TerminalInstance is now wrong, if we click the tab to split a new terminal with the same cwd, VSCode will throw " æ��件" does not exist.

This is likely a regression introduced in #165633: The __vsc_escape_value routine interprets the utf-8 encoded string "文件" as an ISO/ 8859-1 string "�件", then escaped as "\xE6\x96\x87\xE4\xBB\xB6", because the text is processed byte by byte.

Potential solution:

1. Escape only a limited character sets for cwd and leave other characters as-is
2. Enhance current escape scheme to support multi-byte strings

[meganrogge]

/duplicate #168804