2 files changed, 249 insertions, 242 deletions

diff --git a/packages/core/src/utils/workspaceContext.test.ts b/packages/core/src/utils/workspaceContext.test.ts
index 67d06b62..5446c287 100644
--- a/packages/core/src/utils/workspaceContext.test.ts
+++ b/packages/core/src/utils/workspaceContext.test.ts
@@ -4,280 +4,304 @@
  * SPDX-License-Identifier: Apache-2.0
  */
 
-import { describe, it, expect, beforeEach, vi } from 'vitest';
+import { describe, it, expect, beforeEach, afterEach } from 'vitest';
 import * as fs from 'fs';
+import * as os from 'os';
 import * as path from 'path';
 import { WorkspaceContext } from './workspaceContext.js';
 
-vi.mock('fs');
-
-describe('WorkspaceContext', () => {
-  let workspaceContext: WorkspaceContext;
-  // Use path module to create platform-agnostic paths
-  const mockCwd = path.resolve(path.sep, 'home', 'user', 'project');
-  const mockExistingDir = path.resolve(
-    path.sep,
-    'home',
-    'user',
-    'other-project',
-  );
-  const mockNonExistentDir = path.resolve(
-    path.sep,
-    'home',
-    'user',
-    'does-not-exist',
-  );
-  const mockSymlinkDir = path.resolve(path.sep, 'home', 'user', 'symlink');
-  const mockRealPath = path.resolve(path.sep, 'home', 'user', 'real-directory');
+describe('WorkspaceContext with real filesystem', () => {
+  let tempDir: string;
+  let cwd: string;
+  let otherDir: string;
 
   beforeEach(() => {
-    vi.resetAllMocks();
+    // os.tmpdir() can return a path using a symlink (this is standard on macOS)
+    // Use fs.realpathSync to fully resolve the absolute path.
+    tempDir = fs.realpathSync(
+      fs.mkdtempSync(path.join(os.tmpdir(), 'workspace-context-test-')),
+    );
 
-    // Mock fs.existsSync
-    vi.mocked(fs.existsSync).mockImplementation((path) => {
-      const pathStr = path.toString();
-      return (
-        pathStr === mockCwd ||
-        pathStr === mockExistingDir ||
-        pathStr === mockSymlinkDir ||
-        pathStr === mockRealPath
-      );
-    });
+    cwd = path.join(tempDir, 'project');
+    otherDir = path.join(tempDir, 'other-project');
 
-    // Mock fs.statSync
-    vi.mocked(fs.statSync).mockImplementation((path) => {
-      const pathStr = path.toString();
-      if (pathStr === mockNonExistentDir) {
-        throw new Error('ENOENT');
-      }
-      return {
-        isDirectory: () => true,
-      } as fs.Stats;
-    });
+    fs.mkdirSync(cwd, { recursive: true });
+    fs.mkdirSync(otherDir, { recursive: true });
+  });
 
-    // Mock fs.realpathSync
-    vi.mocked(fs.realpathSync).mockImplementation((path) => {
-      const pathStr = path.toString();
-      if (pathStr === mockSymlinkDir) {
-        return mockRealPath;
-      }
-      return pathStr;
-    });
+  afterEach(() => {
+    fs.rmSync(tempDir, { recursive: true, force: true });
   });
 
   describe('initialization', () => {
     it('should initialize with a single directory (cwd)', () => {
-      workspaceContext = new WorkspaceContext(mockCwd);
+      const workspaceContext = new WorkspaceContext(cwd);
       const directories = workspaceContext.getDirectories();
-      expect(directories).toHaveLength(1);
-      expect(directories[0]).toBe(mockCwd);
+
+      expect(directories).toEqual([cwd]);
     });
 
     it('should validate and resolve directories to absolute paths', () => {
-      const absolutePath = path.join(mockCwd, 'subdir');
-      vi.mocked(fs.existsSync).mockImplementation(
-        (p) => p === mockCwd || p === absolutePath,
-      );
-      vi.mocked(fs.realpathSync).mockImplementation((p) => p.toString());
-
-      workspaceContext = new WorkspaceContext(mockCwd, [absolutePath]);
+      const workspaceContext = new WorkspaceContext(cwd, [otherDir]);
       const directories = workspaceContext.getDirectories();
-      expect(directories).toContain(absolutePath);
+
+      expect(directories).toEqual([cwd, otherDir]);
     });
 
     it('should reject non-existent directories', () => {
+      const nonExistentDir = path.join(tempDir, 'does-not-exist');
       expect(() => {
-        new WorkspaceContext(mockCwd, [mockNonExistentDir]);
+        new WorkspaceContext(cwd, [nonExistentDir]);
       }).toThrow('Directory does not exist');
     });
 
     it('should handle empty initialization', () => {
-      workspaceContext = new WorkspaceContext(mockCwd, []);
+      const workspaceContext = new WorkspaceContext(cwd, []);
       const directories = workspaceContext.getDirectories();
       expect(directories).toHaveLength(1);
-      expect(directories[0]).toBe(mockCwd);
+      expect(fs.realpathSync(directories[0])).toBe(cwd);
     });
   });
 
   describe('adding directories', () => {
-    beforeEach(() => {
-      workspaceContext = new WorkspaceContext(mockCwd);
-    });
-
     it('should add valid directories', () => {
-      workspaceContext.addDirectory(mockExistingDir);
+      const workspaceContext = new WorkspaceContext(cwd);
+      workspaceContext.addDirectory(otherDir);
       const directories = workspaceContext.getDirectories();
-      expect(directories).toHaveLength(2);
-      expect(directories).toContain(mockExistingDir);
+
+      expect(directories).toEqual([cwd, otherDir]);
     });
 
     it('should resolve relative paths to absolute', () => {
-      // Since we can't mock path.resolve, we'll test with absolute paths
-      workspaceContext.addDirectory(mockExistingDir);
+      const workspaceContext = new WorkspaceContext(cwd);
+      const relativePath = path.relative(cwd, otherDir);
+      workspaceContext.addDirectory(relativePath, cwd);
       const directories = workspaceContext.getDirectories();
-      expect(directories).toContain(mockExistingDir);
+
+      expect(directories).toEqual([cwd, otherDir]);
     });
 
     it('should reject non-existent directories', () => {
+      const nonExistentDir = path.join(tempDir, 'does-not-exist');
+      const workspaceContext = new WorkspaceContext(cwd);
+
       expect(() => {
-        workspaceContext.addDirectory(mockNonExistentDir);
+        workspaceContext.addDirectory(nonExistentDir);
       }).toThrow('Directory does not exist');
     });
 
     it('should prevent duplicate directories', () => {
-      workspaceContext.addDirectory(mockExistingDir);
-      workspaceContext.addDirectory(mockExistingDir);
+      const workspaceContext = new WorkspaceContext(cwd);
+      workspaceContext.addDirectory(otherDir);
+      workspaceContext.addDirectory(otherDir);
       const directories = workspaceContext.getDirectories();
-      expect(directories.filter((d) => d === mockExistingDir)).toHaveLength(1);
+
+      expect(directories).toHaveLength(2);
     });
 
     it('should handle symbolic links correctly', () => {
-      workspaceContext.addDirectory(mockSymlinkDir);
+      const realDir = path.join(tempDir, 'real');
+      fs.mkdirSync(realDir, { recursive: true });
+      const symlinkDir = path.join(tempDir, 'symlink-to-real');
+      fs.symlinkSync(realDir, symlinkDir, 'dir');
+      const workspaceContext = new WorkspaceContext(cwd);
+      workspaceContext.addDirectory(symlinkDir);
+
       const directories = workspaceContext.getDirectories();
-      expect(directories).toContain(mockRealPath);
-      expect(directories).not.toContain(mockSymlinkDir);
+
+      expect(directories).toEqual([cwd, realDir]);
     });
   });
 
   describe('path validation', () => {
-    beforeEach(() => {
-      workspaceContext = new WorkspaceContext(mockCwd, [mockExistingDir]);
+    it('should accept paths within workspace directories', () => {
+      const workspaceContext = new WorkspaceContext(cwd, [otherDir]);
+      const validPath1 = path.join(cwd, 'src', 'file.ts');
+      const validPath2 = path.join(otherDir, 'lib', 'module.js');
+
+      fs.mkdirSync(path.dirname(validPath1), { recursive: true });
+      fs.writeFileSync(validPath1, 'content');
+      fs.mkdirSync(path.dirname(validPath2), { recursive: true });
+      fs.writeFileSync(validPath2, 'content');
+
+      expect(workspaceContext.isPathWithinWorkspace(validPath1)).toBe(true);
+      expect(workspaceContext.isPathWithinWorkspace(validPath2)).toBe(true);
     });
 
-    it('should accept paths within workspace directories', () => {
-      const validPath1 = path.join(mockCwd, 'src', 'file.ts');
-      const validPath2 = path.join(mockExistingDir, 'lib', 'module.js');
+    it('should accept non-existent paths within workspace directories', () => {
+      const workspaceContext = new WorkspaceContext(cwd, [otherDir]);
+      const validPath1 = path.join(cwd, 'src', 'file.ts');
+      const validPath2 = path.join(otherDir, 'lib', 'module.js');
 
       expect(workspaceContext.isPathWithinWorkspace(validPath1)).toBe(true);
       expect(workspaceContext.isPathWithinWorkspace(validPath2)).toBe(true);
     });
 
     it('should reject paths outside workspace', () => {
-      const invalidPath = path.resolve(
-        path.dirname(mockCwd),
-        'outside-workspace',
-        'file.txt',
-      );
+      const workspaceContext = new WorkspaceContext(cwd, [otherDir]);
+      const invalidPath = path.join(tempDir, 'outside-workspace', 'file.txt');
+
       expect(workspaceContext.isPathWithinWorkspace(invalidPath)).toBe(false);
     });
 
-    it('should resolve symbolic links before validation', () => {
-      const symlinkPath = path.join(mockCwd, 'symlink-file');
-      const realPath = path.join(mockCwd, 'real-file');
+    it('should reject non-existent paths outside workspace', () => {
+      const workspaceContext = new WorkspaceContext(cwd, [otherDir]);
+      const invalidPath = path.join(tempDir, 'outside-workspace', 'file.txt');
 
-      vi.mocked(fs.existsSync).mockReturnValue(true);
-      vi.mocked(fs.realpathSync).mockImplementation((p) => {
-        if (p === symlinkPath) {
-          return realPath;
-        }
-        return p.toString();
-      });
-
-      expect(workspaceContext.isPathWithinWorkspace(symlinkPath)).toBe(true);
+      expect(workspaceContext.isPathWithinWorkspace(invalidPath)).toBe(false);
     });
 
     it('should handle nested directories correctly', () => {
-      const nestedPath = path.join(
-        mockCwd,
-        'deeply',
-        'nested',
-        'path',
-        'file.txt',
-      );
+      const workspaceContext = new WorkspaceContext(cwd, [otherDir]);
+      const nestedPath = path.join(cwd, 'deeply', 'nested', 'path', 'file.txt');
       expect(workspaceContext.isPathWithinWorkspace(nestedPath)).toBe(true);
     });
 
     it('should handle edge cases (root, parent references)', () => {
-      const rootPath = '/';
-      const parentPath = path.dirname(mockCwd);
+      const workspaceContext = new WorkspaceContext(cwd, [otherDir]);
+      const rootPath = path.parse(tempDir).root;
+      const parentPath = path.dirname(cwd);
 
       expect(workspaceContext.isPathWithinWorkspace(rootPath)).toBe(false);
       expect(workspaceContext.isPathWithinWorkspace(parentPath)).toBe(false);
     });
 
     it('should handle non-existent paths correctly', () => {
-      const nonExistentPath = path.join(mockCwd, 'does-not-exist.txt');
-      vi.mocked(fs.existsSync).mockImplementation((p) => p !== nonExistentPath);
-
-      // Should still validate based on path structure
+      const workspaceContext = new WorkspaceContext(cwd, [otherDir]);
+      const nonExistentPath = path.join(cwd, 'does-not-exist.txt');
       expect(workspaceContext.isPathWithinWorkspace(nonExistentPath)).toBe(
         true,
       );
     });
-  });
 
-  describe('getDirectories', () => {
-    it('should return a copy of directories array', () => {
-      workspaceContext = new WorkspaceContext(mockCwd);
-      const dirs1 = workspaceContext.getDirectories();
-      const dirs2 = workspaceContext.getDirectories();
+    describe('with symbolic link', () => {
+      describe('in the workspace', () => {
+        let realDir: string;
+        let symlinkDir: string;
+        beforeEach(() => {
+          realDir = path.join(cwd, 'real-dir');
+          fs.mkdirSync(realDir, { recursive: true });
 
-      expect(dirs1).not.toBe(dirs2); // Different array instances
-      expect(dirs1).toEqual(dirs2); // Same content
-    });
-  });
+          symlinkDir = path.join(cwd, 'symlink-file');
+          fs.symlinkSync(realDir, symlinkDir, 'dir');
+        });
 
-  describe('symbolic link security', () => {
-    beforeEach(() => {
-      workspaceContext = new WorkspaceContext(mockCwd);
-    });
+        it('should accept dir paths', () => {
+          const workspaceContext = new WorkspaceContext(cwd);
+
+          expect(workspaceContext.isPathWithinWorkspace(symlinkDir)).toBe(true);
+        });
 
-    it('should follow symlinks but validate resolved path', () => {
-      const symlinkInsideWorkspace = path.join(mockCwd, 'link-to-subdir');
-      const resolvedInsideWorkspace = path.join(mockCwd, 'subdir');
+        it('should accept non-existent paths', () => {
+          const filePath = path.join(symlinkDir, 'does-not-exist.txt');
 
-      vi.mocked(fs.existsSync).mockReturnValue(true);
-      vi.mocked(fs.realpathSync).mockImplementation((p) => {
-        if (p === symlinkInsideWorkspace) {
-          return resolvedInsideWorkspace;
-        }
-        return p.toString();
+          const workspaceContext = new WorkspaceContext(cwd);
+
+          expect(workspaceContext.isPathWithinWorkspace(filePath)).toBe(true);
+        });
+
+        it('should accept non-existent deep paths', () => {
+          const filePath = path.join(symlinkDir, 'deep', 'does-not-exist.txt');
+
+          const workspaceContext = new WorkspaceContext(cwd);
+
+          expect(workspaceContext.isPathWithinWorkspace(filePath)).toBe(true);
+        });
       });
 
-      expect(
-        workspaceContext.isPathWithinWorkspace(symlinkInsideWorkspace),
-      ).toBe(true);
-    });
+      describe('outside the workspace', () => {
+        let realDir: string;
+        let symlinkDir: string;
+        beforeEach(() => {
+          realDir = path.join(tempDir, 'real-dir');
+          fs.mkdirSync(realDir, { recursive: true });
+
+          symlinkDir = path.join(cwd, 'symlink-file');
+          fs.symlinkSync(realDir, symlinkDir, 'dir');
+        });
+
+        it('should reject dir paths', () => {
+          const workspaceContext = new WorkspaceContext(cwd);
+
+          expect(workspaceContext.isPathWithinWorkspace(symlinkDir)).toBe(
+            false,
+          );
+        });
+
+        it('should reject non-existent paths', () => {
+          const filePath = path.join(symlinkDir, 'does-not-exist.txt');
+
+          const workspaceContext = new WorkspaceContext(cwd);
+
+          expect(workspaceContext.isPathWithinWorkspace(filePath)).toBe(false);
+        });
+
+        it('should reject non-existent deep paths', () => {
+          const filePath = path.join(symlinkDir, 'deep', 'does-not-exist.txt');
+
+          const workspaceContext = new WorkspaceContext(cwd);
+
+          expect(workspaceContext.isPathWithinWorkspace(filePath)).toBe(false);
+        });
 
-    it('should prevent sandbox escape via symlinks', () => {
-      const symlinkEscape = path.join(mockCwd, 'escape-link');
-      const resolvedOutside = path.resolve(mockCwd, '..', 'outside-file');
+        it('should reject partially non-existent deep paths', () => {
+          const deepDir = path.join(symlinkDir, 'deep');
+          fs.mkdirSync(deepDir, { recursive: true });
+          const filePath = path.join(deepDir, 'does-not-exist.txt');
 
-      vi.mocked(fs.existsSync).mockImplementation((p) => {
-        const pathStr = p.toString();
-        return (
-          pathStr === symlinkEscape ||
-          pathStr === resolvedOutside ||
-          pathStr === mockCwd
-        );
+          const workspaceContext = new WorkspaceContext(cwd);
+
+          expect(workspaceContext.isPathWithinWorkspace(filePath)).toBe(false);
+        });
       });
-      vi.mocked(fs.realpathSync).mockImplementation((p) => {
-        if (p.toString() === symlinkEscape) {
-          return resolvedOutside;
-        }
-        return p.toString();
+
+      it('should reject symbolic file links outside the workspace', () => {
+        const realFile = path.join(tempDir, 'real-file.txt');
+        fs.writeFileSync(realFile, 'content');
+
+        const symlinkFile = path.join(cwd, 'symlink-to-real-file');
+        fs.symlinkSync(realFile, symlinkFile, 'file');
+
+        const workspaceContext = new WorkspaceContext(cwd);
+
+        expect(workspaceContext.isPathWithinWorkspace(symlinkFile)).toBe(false);
       });
-      vi.mocked(fs.statSync).mockImplementation(
-        (p) =>
-          ({
-            isDirectory: () => p.toString() !== resolvedOutside,
-          }) as fs.Stats,
-      );
 
-      workspaceContext = new WorkspaceContext(mockCwd);
-      expect(workspaceContext.isPathWithinWorkspace(symlinkEscape)).toBe(false);
-    });
+      it('should reject non-existent symbolic file links outside the workspace', () => {
+        const realFile = path.join(tempDir, 'real-file.txt');
+
+        const symlinkFile = path.join(cwd, 'symlink-to-real-file');
+        fs.symlinkSync(realFile, symlinkFile, 'file');
+
+        const workspaceContext = new WorkspaceContext(cwd);
 
-    it('should handle circular symlinks', () => {
-      const circularLink = path.join(mockCwd, 'circular');
+        expect(workspaceContext.isPathWithinWorkspace(symlinkFile)).toBe(false);
+      });
+
+      it('should handle circular symlinks gracefully', () => {
+        const workspaceContext = new WorkspaceContext(cwd);
+        const linkA = path.join(cwd, 'link-a');
+        const linkB = path.join(cwd, 'link-b');
+        // Create a circular dependency: linkA -> linkB -> linkA
+        fs.symlinkSync(linkB, linkA, 'dir');
+        fs.symlinkSync(linkA, linkB, 'dir');
 
-      vi.mocked(fs.existsSync).mockReturnValue(true);
-      vi.mocked(fs.realpathSync).mockImplementation(() => {
-        throw new Error('ELOOP: too many symbolic links encountered');
+        // fs.realpathSync should throw ELOOP, and isPathWithinWorkspace should
+        // handle it gracefully and return false.
+        expect(workspaceContext.isPathWithinWorkspace(linkA)).toBe(false);
+        expect(workspaceContext.isPathWithinWorkspace(linkB)).toBe(false);
       });
+    });
+  });
+
+  describe('getDirectories', () => {
+    it('should return a copy of directories array', () => {
+      const workspaceContext = new WorkspaceContext(cwd);
+      const dirs1 = workspaceContext.getDirectories();
+      const dirs2 = workspaceContext.getDirectories();
 
-      // Should handle the error gracefully
-      expect(workspaceContext.isPathWithinWorkspace(circularLink)).toBe(false);
+      expect(dirs1).not.toBe(dirs2);
+      expect(dirs1).toEqual(dirs2);
     });
   });
 });
diff --git a/packages/core/src/utils/workspaceContext.ts b/packages/core/src/utils/workspaceContext.ts
index efbc8a4c..be99a83c 100644
--- a/packages/core/src/utils/workspaceContext.ts
+++ b/packages/core/src/utils/workspaceContext.ts
@@ -4,6 +4,7 @@
  * SPDX-License-Identifier: Apache-2.0
  */
 
+import { isNodeError } from '../utils/errors.js';
 import * as fs from 'fs';
 import * as path from 'path';
 
@@ -13,26 +14,21 @@ import * as path from 'path';
  * in a single session.
  */
 export class WorkspaceContext {
-  private directories: Set<string>;
-
+  private directories = new Set<string>();
   private initialDirectories: Set<string>;
 
   /**
    * Creates a new WorkspaceContext with the given initial directory and optional additional directories.
-   * @param initialDirectory The initial working directory (usually cwd)
+   * @param directory The initial working directory (usually cwd)
    * @param additionalDirectories Optional array of additional directories to include
    */
-  constructor(initialDirectory: string, additionalDirectories: string[] = []) {
-    this.directories = new Set<string>();
-    this.initialDirectories = new Set<string>();
-
-    this.addDirectoryInternal(initialDirectory);
-    this.addInitialDirectoryInternal(initialDirectory);
-
-    for (const dir of additionalDirectories) {
-      this.addDirectoryInternal(dir);
-      this.addInitialDirectoryInternal(dir);
+  constructor(directory: string, additionalDirectories: string[] = []) {
+    this.addDirectory(directory);
+    for (const additionalDirectory of additionalDirectories) {
+      this.addDirectory(additionalDirectory);
     }
+
+    this.initialDirectories = new Set(this.directories);
   }
 
   /**
@@ -41,16 +37,13 @@ export class WorkspaceContext {
    * @param basePath Optional base path for resolving relative paths (defaults to cwd)
    */
   addDirectory(directory: string, basePath: string = process.cwd()): void {
-    this.addDirectoryInternal(directory, basePath);
+    this.directories.add(this.resolveAndValidateDir(directory, basePath));
   }
 
-  /**
-   * Internal method to add a directory with validation.
-   */
-  private addDirectoryInternal(
+  private resolveAndValidateDir(
     directory: string,
     basePath: string = process.cwd(),
-  ): void {
+  ): string {
     const absolutePath = path.isAbsolute(directory)
       ? directory
       : path.resolve(basePath, directory);
@@ -58,47 +51,12 @@ export class WorkspaceContext {
     if (!fs.existsSync(absolutePath)) {
       throw new Error(`Directory does not exist: ${absolutePath}`);
     }
-
     const stats = fs.statSync(absolutePath);
     if (!stats.isDirectory()) {
       throw new Error(`Path is not a directory: ${absolutePath}`);
     }
 
-    let realPath: string;
-    try {
-      realPath = fs.realpathSync(absolutePath);
-    } catch (_error) {
-      throw new Error(`Failed to resolve path: ${absolutePath}`);
-    }
-
-    this.directories.add(realPath);
-  }
-
-  private addInitialDirectoryInternal(
-    directory: string,
-    basePath: string = process.cwd(),
-  ): void {
-    const absolutePath = path.isAbsolute(directory)
-      ? directory
-      : path.resolve(basePath, directory);
-
-    if (!fs.existsSync(absolutePath)) {
-      throw new Error(`Directory does not exist: ${absolutePath}`);
-    }
-
-    const stats = fs.statSync(absolutePath);
-    if (!stats.isDirectory()) {
-      throw new Error(`Path is not a directory: ${absolutePath}`);
-    }
-
-    let realPath: string;
-    try {
-      realPath = fs.realpathSync(absolutePath);
-    } catch (_error) {
-      throw new Error(`Failed to resolve path: ${absolutePath}`);
-    }
-
-    this.initialDirectories.add(realPath);
+    return fs.realpathSync(absolutePath);
   }
 
   /**
@@ -116,7 +74,7 @@ export class WorkspaceContext {
   setDirectories(directories: readonly string[]): void {
     this.directories.clear();
     for (const dir of directories) {
-      this.addDirectoryInternal(dir);
+      this.addDirectory(dir);
     }
   }
 
@@ -127,23 +85,13 @@ export class WorkspaceContext {
    */
   isPathWithinWorkspace(pathToCheck: string): boolean {
     try {
-      const absolutePath = path.resolve(pathToCheck);
-
-      let resolvedPath = absolutePath;
-      if (fs.existsSync(absolutePath)) {
-        try {
-          resolvedPath = fs.realpathSync(absolutePath);
-        } catch (_error) {
-          return false;
-        }
-      }
+      const fullyResolvedPath = this.fullyResolvedPath(pathToCheck);
 
       for (const dir of this.directories) {
-        if (this.isPathWithinRoot(resolvedPath, dir)) {
+        if (this.isPathWithinRoot(fullyResolvedPath, dir)) {
           return true;
         }
       }
-
       return false;
     } catch (_error) {
       return false;
@@ -151,6 +99,30 @@ export class WorkspaceContext {
   }
 
   /**
+   * Fully resolves a path, including symbolic links.
+   * If the path does not exist, it returns the fully resolved path as it would be
+   * if it did exist.
+   */
+  private fullyResolvedPath(pathToCheck: string): string {
+    try {
+      return fs.realpathSync(pathToCheck);
+    } catch (e: unknown) {
+      if (
+        isNodeError(e) &&
+        e.code === 'ENOENT' &&
+        e.path &&
+        // realpathSync does not set e.path correctly for symlinks to
+        // non-existent files.
+        !this.isFileSymlink(e.path)
+      ) {
+        // If it doesn't exist, e.path contains the fully resolved path.
+        return e.path;
+      }
+      throw e;
+    }
+  }
+
+  /**
    * Checks if a path is within a given root directory.
    * @param pathToCheck The absolute path to check
    * @param rootDirectory The absolute root directory
@@ -167,4 +139,15 @@ export class WorkspaceContext {
       !path.isAbsolute(relative)
     );
   }
+
+  /**
+   * Checks if a file path is a symbolic link that points to a file.
+   */
+  private isFileSymlink(filePath: string): boolean {
+    try {
+      return !fs.readlinkSync(filePath).endsWith('/');
+    } catch (_error) {
+      return false;
+    }
+  }
 }