diff --git a/ci/dev/vscode.patch b/ci/dev/vscode.patch
index ad613305..ed83c523 100644
--- a/ci/dev/vscode.patch
+++ b/ci/dev/vscode.patch
@@ -734,7 +734,7 @@ index 3715cbb8e6ee41c3d9b5090918d243b723ae2d00..c65de8ad37e727d66da97a8f8b170cbc
 -
 -
 diff --git a/src/vs/platform/remote/common/remoteAgentConnection.ts b/src/vs/platform/remote/common/remoteAgentConnection.ts
-index fdd5890c69f72025b94913380f0d226226e8c8fb..e084236526b38c1144d47b8b3000b367c3207fe8 100644
+index fdd5890c69f72025b94913380f0d226226e8c8fb..957b4812783f6b1d97d1003c63725f541042059f 100644
 --- a/src/vs/platform/remote/common/remoteAgentConnection.ts
 +++ b/src/vs/platform/remote/common/remoteAgentConnection.ts
 @@ -93,7 +93,7 @@ async function connectToRemoteExtensionHostAgent(options: ISimpleConnectionOptio
@@ -746,6 +746,25 @@ index fdd5890c69f72025b94913380f0d226226e8c8fb..e084236526b38c1144d47b8b3000b367
  			(err: any, socket: ISocket | undefined) => {
  				if (err || !socket) {
  					options.logService.error(`${logPrefix} socketFactory.connect() failed. Error:`);
+@@ -338,7 +338,8 @@ export class ReconnectionWaitEvent {
+ 	public readonly type = PersistentConnectionEventType.ReconnectionWait;
+ 	constructor(
+ 		public readonly durationSeconds: number,
+-		private readonly cancellableTimer: CancelablePromise<void>
++		private readonly cancellableTimer: CancelablePromise<void>,
++		public readonly connectionAttempt: number
+ 	) { }
+ 
+ 	public skipWait(): void {
+@@ -422,7 +423,7 @@ abstract class PersistentConnection extends Disposable {
+ 			const waitTime = (attempt < TIMES.length ? TIMES[attempt] : TIMES[TIMES.length - 1]);
+ 			try {
+ 				const sleepPromise = sleep(waitTime);
+-				this._onDidStateChange.fire(new ReconnectionWaitEvent(waitTime, sleepPromise));
++				this._onDidStateChange.fire(new ReconnectionWaitEvent(waitTime, sleepPromise, attempt+1));
+ 
+ 				this._options.logService.info(`${logPrefix} waiting for ${waitTime} seconds before reconnecting...`);
+ 				try {
 diff --git a/src/vs/platform/storage/browser/storageService.ts b/src/vs/platform/storage/browser/storageService.ts
 index ab3fd347b69f8a3d9b96e706cd87c911b8ffed6b..9d351037b577f9f1edfd18ae9b3c48a211f4467f 100644
 --- a/src/vs/platform/storage/browser/storageService.ts
@@ -3875,6 +3894,43 @@ index 94e7e7a4bac154c45078a1b5034e50634a7a43af..8164200dcef1efbc65b50eef9c270af3
  				this._filenameKey.set(value ? basename(value) : null);
  				this._dirnameKey.set(value ? dirname(value).fsPath : null);
  				this._pathKey.set(value ? value.fsPath : null);
+diff --git a/src/vs/workbench/contrib/remote/browser/remote.ts b/src/vs/workbench/contrib/remote/browser/remote.ts
+index c6d98b601a3b6966e8a99d2c05b3b7f02b08e6ca..c2a76fbd75d24d509f312cb8bf094eb297374f04 100644
+--- a/src/vs/workbench/contrib/remote/browser/remote.ts
++++ b/src/vs/workbench/contrib/remote/browser/remote.ts
+@@ -778,17 +778,30 @@ class RemoteAgentConnectionStatusListener implements IWorkbenchContribution {
+ 				}
+ 				switch (e.type) {
+ 					case PersistentConnectionEventType.ConnectionLost:
++						break;
++					case PersistentConnectionEventType.ReconnectionWait:
++						const BACKGROUND_RECONNECT_THRESHOLD = 2;
++						// If the first reconnect fails, we show the popup.
++						// This corresponds to about 5s wait.
++						if (e.connectionAttempt < BACKGROUND_RECONNECT_THRESHOLD) {
++							break;
++						}
++
+ 						if (!visibleProgress) {
+ 							visibleProgress = showProgress(ProgressLocation.Dialog, [reconnectButton, reloadButton]);
+ 						}
+ 						visibleProgress.report(nls.localize('connectionLost', "Connection Lost"));
+-						break;
+-					case PersistentConnectionEventType.ReconnectionWait:
++
+ 						reconnectWaitEvent = e;
+ 						visibleProgress = showProgress(lastLocation || ProgressLocation.Notification, [reconnectButton, reloadButton]);
+ 						visibleProgress.startTimer(Date.now() + 1000 * e.durationSeconds);
+ 						break;
+ 					case PersistentConnectionEventType.ReconnectionRunning:
++						if (!visibleProgress) {
++							// Our background reconnection threshold hasn't been hit yet.
++							break;
++						}
++
+ 						visibleProgress = showProgress(lastLocation || ProgressLocation.Notification, [reloadButton]);
+ 						visibleProgress.report(nls.localize('reconnectionRunning', "Attempting to reconnect..."));
+ 
 diff --git a/src/vs/workbench/contrib/scm/browser/media/scm.css b/src/vs/workbench/contrib/scm/browser/media/scm.css
 index 74f6922e98b4bb6a7fb100f5aac015afe9fc171b..3243a97c2d378013d96ffbe87e9df6dd4a66776d 100644
 --- a/src/vs/workbench/contrib/scm/browser/media/scm.css