Regression: TypeScript with Yarn PnP configuration not working in Zed v0.154.2

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Describe the bug / provide steps to reproduce it

After upgrading to Zed v0.154.2, the TypeScript Yarn Plug'n'Play (PnP) configuration in local project settings (.zed/settings.json) stopped working. This setup was functional in Zed v0.153.7, but the recent update seems to have reverted the fix, causing the language server to ignore the local project settings.

Here is the local settings configuration that is not working:

{
  "lsp": {
    "vtsls": {
      "initialization_options": {
        "typescript": {
          "tsdk": ".yarn/sdks/typescript/lib"
        },
        "vtsls": {
          "autoUseWorkspaceTsdk": true
        }
      }
    }
  }
}

Steps to Reproduce:

Upgrade to Zed v0.154.2.

In the local project folder, create or update .zed/settings.json with the following configuration:

{
"lsp": {
"vtsls": {
  "initialization_options": {
    "typescript": {
      "tsdk": ".yarn/sdks/typescript/lib"
    },
    "vtsls": {
      "autoUseWorkspaceTsdk": true
    }
  }
}
}
}

Start the editor and observe the behavior of the language server.

Expected Behavior:

The language server should pick up the configuration from the local project's .zed/settings.json and correctly use the specified TypeScript SDK path.

Actual Behavior:

The language server ignores the local .zed/settings.json settings. This results in the failure of the expected functionality in the project environment.

Additional Notes:

Rolling back to Zed v0.153.7 restores the expected functionality.
It appears that the change introduced in #17657 was reverted, causing this regression.

Related issues

17046

Environment

Zed: v0.154.2 (Zed) OS: macOS 15.0.0 Memory: 16 GiB Architecture: x86_64

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If applicable, attach your Zed.log file to this issue.

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zed-industries / zed