New Terminal action fails to start terminal session

[AmyShang-alt]

Summary

The "New Terminal" action in the new-tab dropdown does not open a terminal session. Instead, the app shows an error toast saying the terminal session cannot be started.

Current behavior

• Open the new-tab dropdown.
• Choose "New Terminal".
• No terminal tab/session is opened.
• A toast appears: "Unable to start terminal session".

Expected behavior

Clicking "New Terminal" should open a terminal session in a new tab for the current project directory.

Steps to reproduce

1. Open a project or live artifact workspace.
2. Open the new-tab dropdown.
3. Click "New Terminal".
4. Observe that no terminal opens and an error toast is shown.

Notes

Screenshots provided in the report show the "New Terminal" item in the dropdown and the resulting error toast.

Why this matters

The dropdown presents terminal creation as an available action, but the action fails immediately. This blocks users from opening a terminal from the workspace UI.

[lefarcen]

Hey @AmyShang-alt — thanks for the clear repro and screenshots.

I traced the toast path on the current branch: the click goes through createTerminal() in apps/web/src/state/projects.ts / apps/web/src/components/FileWorkspace.tsx, and that message only shows when POST /api/projects/:id/terminals comes back non-OK. So this looks more like a daemon-side terminal spawn failure than the tab launcher failing to open/focus the new tab.

Could you paste the response body from that failed /terminals request, or the matching daemon log line? That should tell us pretty quickly whether we're hitting the known node-pty / spawn-helper path in apps/daemon/src/terminals.ts or a different failure in project-dir/session setup.