Change:
// Reuse duplicate action when user copies const explorerConfig = this.configurationService.getValue<IFilesConfiguration>().explorer; <del> const resourceFileEdits = sources.map(({ resource, isDirectory }) => (new ResourceFileEdit(resource, findValidPasteFileTarget(this.explorerService, target, { resource, isDirectory, allowOverwrite: false }, explorerConfig.incrementalNaming), { copy: true }))); </del> <ins> const resourceFileEdits: ResourceFileEdit[] = []; for (const { resource, isDirectory } of sources) { const allowOverwrite = explorerConfig.incrementalNaming === 'disabled'; const newResource = await findValidPasteFileTarget(this.explorerService, this.fileService, this.dialogService, target, { resource, isDirectory, allowOverwrite }, explorerConfig.incrementalNaming ); if (!newResource) { continue; } const resourceEdit = new ResourceFileEdit(resource, newResource, { copy: true, overwrite: allowOverwrite }); resourceFileEdits.push(resourceEdit); } </ins> const labelSufix = getFileOrFolderLabelSufix(sources); await this.explorerService.applyBulkEdit(resourceFileEdits, { confirmBeforeUndo: explorerConfig.confirmUndo === UndoConfirmLevel.Default || explorerConfig.confirmUndo === UndoConfirmLevel.Verbose,

Discussion:
<!-- Do Not Delete This! bugreporttemplate --<!-- Please read our Rules of Conduct: --<!-- Read our guide about submitting issues: --<!-- Search existing issues to avoid creating duplicates. --<!-- Test using the latest Insiders build to see if your issue has already been fixed: --<!-- Instead of creating your report here, use 'Report Issue' from the 'Help' menu in VS Code to pre-fill useful information. --<!-- Launch with to check. --Does this issue occur when all extensions are disabled?: Yes <!-- If you answered No above, use 'Help: Start Extension Bisect' from Command Palette to try to identify the cause. --<!-- Issues caused by an extension need to be reported directly to the extension publisher. The 'Help Report Issue' dialog can assist with this. --- VS Code Version: 1.73.0-insider OS Version: KDE Neon 5.26.2 Steps to Reproduce: to settings (UI). for "duplicate". "Explorer: Incremental Naming" to . the file explorer, hold down the key (to copy a file instead of moving) and drag a file to the same directory. Actual result: VSCode hangs until I am presented the "This window is not responding" dialg. Clicking has the same effect as . Expected result: I am telling VSCode to duplicate a file, while I have taken away its algorithm to automatically create new file names. Therefore I might expect VSCode to show a dialog with a text input. The text input would contain the file's current name, which I can alter. Confirming the dialog would copy the file using the new name. Or something to this effect. But maybe that solution is trying to counter a symptom rather than solving the root of the problem. Because how would should VSCode respond when drag-copying multiple files? Maybe the root of the problem is the ability to set "Explorer: Incremental Naming" to in the first place. Maybe VSCode must always have a 'duplicate file naming algorithm' in order to function? Even if it is a one. Removing and using the algorithm as a bare minimum would surely fix the problem. Addendum: The description of states the user "will be prompted to override the existing file". So this might be the expected / intended result.