[WIP] Fix extension ignoring submodules in Git panel

[Copilot]

Thanks for assigning this issue to me. I'm starting to work on it and will keep this PR's description up to date as I form a plan and make progress.

Original prompt

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This section details on the original issue you should resolve

<issue_title>Extension ignoring submodules</issue_title>
<issue_description>

• Extension version: latest (0.120.2)
• VSCode Version: 1.105.1
• OS: Windows 11 25H2, running on ubuntu 20.04 via Remote-SSH
• Repository Clone Configuration (single repository/fork of an upstream repository): single repository
• GitHub Product (GitHub.com/GitHub Enterprise version): GHE 3.14.8

Steps to Reproduce:

1. Open a Go project
2. Open a file from a local dependency of said project
3. Source control recognizes this as a valid submodule and adds it to the panel
4. But the submodule is missing the "Create PR" button
5. The submodule also does not list on panels like Pull requests, Issues etc.

This was introduced by #7900 and is not seen in older versions like 0.118.2. I have verified that the "ignoreSubmodules" setting is disabled. Also found this log(framework is the submodule btw):

2025-11-03 08:55:35.569 [info] [Activation] Repo file:///root/vega/framework is not in a workspace folder, ignoring.

</issue_description>

Comments on the Issue (you are @copilot in this section)

• Fixes Add a setting to stop ignoring repositories that are outside of the workspace #8075

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