Windows sandbox apply_patch cannot update existing files in VS Code extension: helper_unknown_error applying deny-read ACLs

What version of the IDE extension are you using?

Codex extension for Visual Studio Code on Windows. Exact extension version can be added if needed.

Which IDE are you using?

Visual Studio Code on Windows.

What platform is your computer?

Windows host with an NTFS checkout.

Workspace path:

C:\Users\laksh\Reels Maker Stack\OpenMontage

What issue are you seeing?

In the Codex VS Code extension, apply_patch fails when trying to update an existing tracked file because the Windows sandbox helper cannot apply deny-read ACLs.

Full error:

apply_patch verification failed:
Failed to read file to update
C:\Users\laksh\Reels Maker Stack\OpenMontage\apps\creator-studio-web\lib\jobExecution.ts:
fs sandbox helper failed with status exit code: 1:
windows sandbox failed:
helper_unknown_error: apply deny-read ACLs

The failure happens before the patch is applied. No repository file is modified.

This appears to be a failure in the Codex Windows sandbox ACL helper, rather than Git or the repository's ordinary file permissions.

Steps to reproduce

1. Open an existing Git repository stored on NTFS in the Codex VS Code extension on Windows.
2. Ask Codex to modify an existing tracked file using apply_patch.
3. apply_patch fails before reading or updating the file with:

helper_unknown_error: apply deny-read ACLs

Diagnostic details

• Normal sandboxed PowerShell reads succeed.
• git status succeeds.
• git rev-parse succeeds.
• Unsandboxed/elevated reads succeed.
• apply_patch can sometimes create new files.
• apply_patch cannot read or update an existing tracked file.
• Both absolute and workspace-relative patch paths fail.
• icacls /reset did not fix it.
• Re-enabling inherited permissions did not fix it.
• Restarting Codex did not fix it.
• Rebooting Windows did not fix it.
• The workspace is under a path containing spaces, but both absolute and relative patch paths fail.
• The checkout is on NTFS.

Expected behavior

apply_patch should be able to read and update existing tracked files inside the selected writable VS Code workspace.

Actual behavior

The sandbox ACL helper fails before patch verification, so apply_patch cannot modify existing files even though ordinary reads and Git commands work.

Related issues

There are similar reports for the Windows Codex app/CLI where apply_patch can create files but cannot update or delete existing files, including #32121 and #31229. This report is specifically for the Codex VS Code extension.