@@ -171,19 +171,28 @@ impl LauncherPaths {
 	}
 
 	pub fn new(root: Option<String>) -> Result<LauncherPaths, AnyError> {
-		let root = root
-			.or_else(|| {
-				std::env::var("VSCODE_PORTABLE")
-					.ok()
-					.filter(|s| !s.is_empty())
-					.map(|p| format!("{p}/{DEFAULT_DATA_PARENT_DIR}/cli"))
-			})
-			.unwrap_or_else(|| format!("~/{DEFAULT_DATA_PARENT_DIR}/cli"));
+		if let Some(root) = root {
+			return Self::new_for_root_string(root);
+		}
+
+		if let Ok(portable) = std::env::var("VSCODE_PORTABLE") {
+			if !portable.is_empty() {
+				let mut dir = PathBuf::from(portable);
+				dir.push(DEFAULT_DATA_PARENT_DIR);
+				dir.push("cli");
+				return Self::new_for_path(dir);
+			}
+		}
+
+		Self::new_for_root_string(format!("~/{DEFAULT_DATA_PARENT_DIR}/cli"))
+	}
+
+	fn new_for_root_string(root: String) -> Result<LauncherPaths, AnyError> {
 		let mut replaced = root.to_owned();
 		for token in HOME_DIR_ALTS {
 			if root.contains(token) {
 				if let Some(home) = dirs::home_dir() {
-					replaced = root.replace(token, &home.to_string_lossy())
+					replaced = root.replace(token, &home.to_string_lossy());
 				} else {
 					return Err(AnyError::from(NoHomeForLauncherError()));
 				}
@@ -304,7 +313,8 @@ mod tests {
 	#[test]
 	fn test_launcher_paths_portable_mode() {
 		let temp = tempfile::tempdir().unwrap();
-		let portable_dir = temp.path().join("portable-data");
+		// Test with a path that contains a literal '~' (like Windows 8.3 short paths e.g. PORTAB~1)
+		let portable_dir = temp.path().join("portab~1-data");
 		std::fs::create_dir_all(&portable_dir).unwrap();
 
 		std::env::set_var("VSCODE_PORTABLE", &portable_dir);