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Ambiguous unicode character decoration shows in settings.json but doesn't explain on hover

"terminal.integrated.wordSeparators": " ()[]{}',\"─‘’",
The decoration doesn't show up all the time 🤷

Are you sure it is the same text in both cases?
I get highlighing here:
"terminal.integrated.wordSeparators": " ()[]{}',\"-‘’",
But not here:
"terminal.integrated.wordSeparators": " ()[]{}',\"─‘’",
The reason is that the system does not now that ─ is confusable with an ASCII character (-).
This is because the unicode confusable data is not very reliable (but we never claimed that this heuristic we use is safe - in untrusted workspaces both cases should be highlighted though, but there we highlight every non-ASCII character)