There is a better fix on GitHub that works for upload and download via SFTP extension:
Do a search inside
~/.vscode/extensions/liximomo.sftp-1.12.9/node_modules/ssh2-streams/lib/sftp.js
foroptions.emitClose = false;
Add
options.autoDestroy = false;
after both instances.– mrjcgoodwin commented 8 days ago