fix: adjust cwd for terminal creation & envs creation if project type is file

src/features/envCommands.ts

@@ -1,3 +1,5 @@
+import * as fs from 'fs-extra';
+import * as path from 'path';
 import { commands, QuickInputButtons, TaskExecution, TaskRevealKind, Terminal, Uri, workspace } from 'vscode';
 import {
     CreateEnvironmentOptions,
@@ -539,22 +541,25 @@ export async function createTerminalCommand(
         const pw = await pickProject(api.getPythonProjects());
         if (pw) {
             const env = await api.getEnvironment(pw.uri);
+            const cwd = await findParentIfFile(pw.uri.fsPath);
             if (env) {
-                return await tm.create(env, { cwd: pw.uri });
+                return await tm.create(env, { cwd });
             }
         }
     } else if (context instanceof Uri) {
         const uri = context as Uri;
         const env = await api.getEnvironment(uri);
         const pw = api.getPythonProject(uri);
         if (env && pw) {
-            return await tm.create(env, { cwd: pw.uri });
+            const cwd = await findParentIfFile(pw.uri.fsPath);
+            return await tm.create(env, { cwd });
         }
     } else if (context instanceof ProjectItem) {
         const view = context as ProjectItem;
         const env = await api.getEnvironment(view.project.uri);
+        const cwd = await findParentIfFile(view.project.uri.fsPath);
         if (env) {
-            const terminal = await tm.create(env, { cwd: view.project.uri });
+            const terminal = await tm.create(env, { cwd });
             terminal.show();
             return terminal;
         }
@@ -569,13 +574,23 @@ export async function createTerminalCommand(
         const view = context as PythonEnvTreeItem;
         const pw = await pickProject(api.getPythonProjects());
         if (pw) {
-            const terminal = await tm.create(view.environment, { cwd: pw.uri });
+            const cwd = await findParentIfFile(pw.uri.fsPath);
+            const terminal = await tm.create(view.environment, { cwd });
             terminal.show();
             return terminal;
         }
     }
 }
 
+export async function findParentIfFile(cwd: string): Promise<string> {
+    const stat = await fs.stat(cwd);
+    if (stat.isFile()) {
+        // If the project is a file, use the directory of the file as the cwd
+        return path.dirname(cwd);
+    }
+    return cwd;
+}
+
 export async function runInTerminalCommand(
     item: unknown,
     api: PythonEnvironmentApi,

src/managers/builtin/venvManager.ts

@@ -22,6 +22,7 @@ import { PYTHON_EXTENSION_ID } from '../../common/constants';
 import { VenvManagerStrings } from '../../common/localize';
 import { createDeferred, Deferred } from '../../common/utils/deferred';
 import { showErrorMessage, withProgress } from '../../common/window.apis';
+import { findParentIfFile } from '../../features/envCommands';
 import { NativePythonFinder } from '../common/nativePythonFinder';
 import { getLatest, shortVersion, sortEnvironments } from '../common/utils';
 import {
@@ -125,7 +126,8 @@ export class VenvManager implements EnvironmentManager {
                 return;
             }
 
-            const venvRoot: Uri = uri;
+            const venvRoot: Uri = Uri.file(await findParentIfFile(uri.fsPath));
+
             const globals = await this.baseManager.getEnvironments('global');
             let environment: PythonEnvironment | undefined = undefined;
             if (options?.quickCreate) {