diff --git a/vscode/rootfs/etc/s6-overlay/s6-rc.d/init-code-server/run b/vscode/rootfs/etc/s6-overlay/s6-rc.d/init-code-server/run
index f5e040e..034aebf 100644
--- a/vscode/rootfs/etc/s6-overlay/s6-rc.d/init-code-server/run
+++ b/vscode/rootfs/etc/s6-overlay/s6-rc.d/init-code-server/run
@@ -194,20 +194,20 @@ setup_log_level() {
 
 setup_user_settings() {
     # Ensure User settings path
-    user_path="$DEFAULT_CONFIG_PATH/user"
+    user_path="$ROOT_CODE_SERVER_USER_PATH"
     if [ ! -d "$user_path" ]; then
         mkdir -p "$user_path" ||
             bashio::exit.nok "Could not create persistent User folder."
     fi
 
     # Sets up default user settings on first start.
-    if ! bashio::fs.file_exists "$CODE_SERVER_VSCODE_DIR"/settings.json; then
-        cp "$DEFAULT_FILES_PATH/vscode/settings.json" "$CODE_SERVER_VSCODE_DIR/settings.json"
+    if ! bashio::fs.file_exists "$ROOT_CODE_SERVER_USER_PATH"/settings.json; then
+        cp "$DEFAULT_FILES_PATH/vscode/settings.json" "$ROOT_CODE_SERVER_USER_PATH/settings.json"
     else
         # Upgrade if settings.json is still default from previous version.
-        current=$(sha512sum "$CODE_SERVER_VSCODE_DIR"/settings.json | cut -d " " -f 1)
+        current=$(sha512sum "$ROOT_CODE_SERVER_USER_PATH"/settings.json | cut -d " " -f 1)
         if [[ " ${PREVIOUS_DEFAULT_CONFIG_HASHES[*]} " == *" ${current} "* ]]; then
-            cp "$DEFAULT_FILES_PATH/vscode/settings.json" "$CODE_SERVER_VSCODE_DIR/settings.json"
+            cp "$DEFAULT_FILES_PATH/vscode/settings.json" "$ROOT_CODE_SERVER_USER_PATH/settings.json"
         fi
     fi
 
diff --git a/vscode/rootfs/etc/s6-overlay/s6-rc.d/paths.sh b/vscode/rootfs/etc/s6-overlay/s6-rc.d/paths.sh
index cebc8a2..fd24009 100644
--- a/vscode/rootfs/etc/s6-overlay/s6-rc.d/paths.sh
+++ b/vscode/rootfs/etc/s6-overlay/s6-rc.d/paths.sh
@@ -5,6 +5,8 @@
 readonly DEFAULT_CONFIG_PATH="/data/vscode"
 readonly DEFAULT_FILES_PATH="/var/lib/code-server/defaults"
 readonly ROOT_CODE_SERVER_CONFIG_PATH="/root/.config/code-server/" # needed for code-server to cleanly
+readonly ROOT_CODE_SERVER_USER_PATH="/root/.config/code-server/user" # needed for code-server to cleanly
+
 readonly CODE_SERVER_EXTENSIONS_INSTALL_PATH="$DEFAULT_CONFIG_PATH/extensions"
 readonly CODE_SERVER_EXTENSIONS_LIST="$DEFAULT_CONFIG_PATH/vscode.extensions"
 readonly CODE_SERVER_WORKSPACE_DIR="/data/workspace"
diff --git a/vscode/rootfs/var/lib/code-server/defaults/vscode/SERVER.code-workspace b/vscode/rootfs/var/lib/code-server/defaults/vscode/SERVER.code-workspace
index 0174801..290a2fe 100644
--- a/vscode/rootfs/var/lib/code-server/defaults/vscode/SERVER.code-workspace
+++ b/vscode/rootfs/var/lib/code-server/defaults/vscode/SERVER.code-workspace
@@ -1,5 +1,4 @@
 {
-	"extends": ".vscode/settings.json",
 	"folders": [
 		{
 			"path": "."
@@ -9,7 +8,12 @@
 		"files.associations": {
 			"*.yaml": "home-assistant"
 		},
-		"window.autoDetectColorScheme": true
+		"window.autoDetectColorScheme": true,
+		"terminal.integrated.defaultProfile.linux": "zsh",
+		"esphome.validator": "local",
+		"terminal.integrated.copyOnSelection": true,
+		"workbench.iconTheme": "vs-seti",
+		"yaml.format.enable": true,
 	},
 	"extensions": {
 		"recommendations": [