Q:

Is there a way that VSO vNext builds can clean up long directory paths (>260 characters)

I've setup a .Net TFS Build vNext build to run the following:

npm install
gulp
visual studio solution build

The build is confgured to clean automatically before checking for sources like so:

I have two problems with this build but this question is about problem #2. 

The npm install step fails to install phantomjs because the command node install.js can't find node, even though node is in the System path. 

Running builds configured to Clean fails because of the path too long error below. 

[error]The specified path, file name, or both are too long.  The fully qualified file name must be less than 260 characters, and the directory name must be less than 248 characters. 
I would like for the Clean setting to just work and clean up these longs paths, but I don't know how to make it work properly. 
When I tried to re-create this same build in TeamCity the Clean option works just fine.  Also, I know that if I had access to the script that is running the clean that it could just use a *rmdir /S /Q  to remove these paths.  Hopefully the VSO build can just run this or something that works. 

A:

[EDIT] - I have confirmed that this is fixed in the latest Build agent version (1.85.1)
I've been told by MS folks that this is currently a bug in the vNext builds and will be fixed in the next release of the product.  I'll update this answer once I see this fix released.