Terminal access in agent mode (VSCode)

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Just started using Copilot with VSCode. In agent mode, one would expect the system to be able to run the code it writes and at least check on its own whether it is working and not failing with an error message.
However, for a fresh setup of VSCode Insiders (on Windows 10 at least) this does not seem to be the case. When specifically asked to run the code and fix the bug which immediately appears, it responds "I tried to run the code to see the error, but I wasn't able to see the output due to shell integration not being enabled."

Any ideas how to fix this? My google-fu is too weak, apparently.