diff --git a/src/vs/workbench/contrib/chat/browser/widget/chatContentParts/toolInvocationParts/chatTerminalToolProgressPart.ts b/src/vs/workbench/contrib/chat/browser/widget/chatContentParts/toolInvocationParts/chatTerminalToolProgressPart.ts
index 8484113db94..da42cf8d77b 100644
--- a/src/vs/workbench/contrib/chat/browser/widget/chatContentParts/toolInvocationParts/chatTerminalToolProgressPart.ts
+++ b/src/vs/workbench/contrib/chat/browser/widget/chatContentParts/toolInvocationParts/chatTerminalToolProgressPart.ts
@@ -5,7 +5,7 @@
 
 import { h } from '../../../../../../../base/browser/dom.js';
 import { ActionBar } from '../../../../../../../base/browser/ui/actionbar/actionbar.js';
-import { escapeMarkdownSyntaxTokens, isMarkdownString, MarkdownString } from '../../../../../../../base/common/htmlContent.js';
+import { isMarkdownString, MarkdownString } from '../../../../../../../base/common/htmlContent.js';
 import { IConfigurationService } from '../../../../../../../platform/configuration/common/configuration.js';
 import { IInstantiationService } from '../../../../../../../platform/instantiation/common/instantiation.js';
 import { ChatConfiguration } from '../../../../common/constants.js';
@@ -1624,7 +1624,7 @@ export class ContinueInBackgroundAction extends Action implements IAction {
 	}
 }
 
-class ChatTerminalThinkingCollapsibleWrapper extends ChatCollapsibleContentPart {
+export class ChatTerminalThinkingCollapsibleWrapper extends ChatCollapsibleContentPart {
 	private readonly _terminalContentElement: HTMLElement;
 	private readonly _commandText: string;
 	private readonly _isSandboxWrapped: boolean;
@@ -1640,11 +1640,13 @@ class ChatTerminalThinkingCollapsibleWrapper extends ChatCollapsibleContentPart
 		@IHoverService hoverService: IHoverService,
 		@IConfigurationService configurationService: IConfigurationService,
 	) {
-		const title = isComplete ? `Ran \`${escapeMarkdownSyntaxTokens(commandText)}\`` : `Running \`${escapeMarkdownSyntaxTokens(commandText)}\``;
+		const title = isComplete
+			? localize('chat.terminal.ran.plain', "Ran {0}", commandText)
+			: localize('chat.terminal.running.plain', "Running {0}", commandText);
 		super(title, context, undefined, hoverService, configurationService);
 
 		this._terminalContentElement = contentElement;
-		this._commandText = escapeMarkdownSyntaxTokens(commandText);
+		this._commandText = commandText;
 		this._isSandboxWrapped = isSandboxWrapped;
 		this._isComplete = isComplete;
 
@@ -1663,16 +1665,22 @@ class ChatTerminalThinkingCollapsibleWrapper extends ChatCollapsibleContentPart
 			return;
 		}
 
-		if (this._isSandboxWrapped) {
-			this._collapseButton.label = new MarkdownString(this._isComplete
-				? localize('chat.terminal.ranInSandbox', "Ran `{0}` in sandbox", this._commandText)
-				: localize('chat.terminal.runningInSandbox', "Running `{0}` in sandbox", this._commandText));
-			return;
-		}
-
 		const labelElement = this._collapseButton.labelElement;
 		labelElement.textContent = '';
 
+		if (this._isSandboxWrapped) {
+			const prefixText = this._isComplete
+				? localize('chat.terminal.ranInSandbox.prefix', "Ran ")
+				: localize('chat.terminal.runningInSandbox.prefix', "Running ");
+			const suffixText = localize('chat.terminal.sandbox.suffix', " in sandbox");
+			labelElement.appendChild(document.createTextNode(prefixText));
+			const codeElement = document.createElement('code');
+			codeElement.textContent = this._commandText;
+			labelElement.appendChild(codeElement);
+			labelElement.appendChild(document.createTextNode(suffixText));
+			return;
+		}
+
 		const prefixText = this._isComplete
 			? localize('chat.terminal.ran.prefix', "Ran ")
 			: localize('chat.terminal.running.prefix', "Running ");
diff --git a/src/vs/workbench/test/browser/componentFixtures/chatTerminalCollapsible.fixture.ts b/src/vs/workbench/test/browser/componentFixtures/chatTerminalCollapsible.fixture.ts
new file mode 100644
index 00000000000..d4a8c16439d
--- /dev/null
+++ b/src/vs/workbench/test/browser/componentFixtures/chatTerminalCollapsible.fixture.ts
@@ -0,0 +1,95 @@
+/*---------------------------------------------------------------------------------------------
+ *  Copyright (c) Microsoft Corporation. All rights reserved.
+ *  Licensed under the MIT License. See License.txt in the project root for license information.
+ *--------------------------------------------------------------------------------------------*/
+
+import * as dom from '../../../../base/browser/dom.js';
+import { Event } from '../../../../base/common/event.js';
+import { observableValue } from '../../../../base/common/observable.js';
+import { mock, upcastPartial } from '../../../../base/test/common/mock.js';
+import type { IChatContentPartRenderContext, InlineTextModelCollection } from '../../../contrib/chat/browser/widget/chatContentParts/chatContentParts.js';
+import type { IChatResponseViewModel } from '../../../contrib/chat/common/model/chatViewModel.js';
+import { ChatTerminalThinkingCollapsibleWrapper } from '../../../contrib/chat/browser/widget/chatContentParts/toolInvocationParts/chatTerminalToolProgressPart.js';
+import { ComponentFixtureContext, createEditorServices, defineComponentFixture, defineThemedFixtureGroup } from './fixtureUtils.js';
+
+import '../../../contrib/chat/browser/widget/media/chat.css';
+
+function createMockContext(): IChatContentPartRenderContext {
+	return {
+		element: new class extends mock<IChatResponseViewModel>() { }(),
+		elementIndex: 0,
+		container: document.createElement('div'),
+		content: [],
+		contentIndex: 0,
+		editorPool: undefined!,
+		codeBlockStartIndex: 0,
+		treeStartIndex: 0,
+		diffEditorPool: undefined!,
+		codeBlockModelCollection: undefined!,
+		currentWidth: observableValue('currentWidth', 400),
+		onDidChangeVisibility: Event.None,
+		inlineTextModels: upcastPartial<InlineTextModelCollection>({}),
+	};
+}
+
+function renderCollapsible(context: ComponentFixtureContext, commandText: string, isSandboxWrapped: boolean, isComplete: boolean): void {
+	const { container, disposableStore } = context;
+
+	const instantiationService = createEditorServices(disposableStore, {
+		colorTheme: context.theme,
+	});
+
+	container.style.width = '500px';
+	container.style.padding = '8px';
+	container.classList.add('monaco-workbench');
+
+	const session = dom.$('.interactive-session');
+	container.appendChild(session);
+
+	const contentElement = dom.$('.chat-terminal-output-placeholder');
+	contentElement.textContent = '(terminal output would appear here)';
+	contentElement.style.padding = '8px';
+	contentElement.style.color = 'var(--vscode-descriptionForeground)';
+
+	const wrapper = disposableStore.add(instantiationService.createInstance(
+		ChatTerminalThinkingCollapsibleWrapper,
+		commandText,
+		isSandboxWrapped,
+		contentElement,
+		createMockContext(),
+		false,
+		isComplete,
+	));
+
+	session.appendChild(wrapper.domNode);
+}
+
+export default defineThemedFixtureGroup({ path: 'chat/terminalCollapsible/' }, {
+	'Ran - simple command': defineComponentFixture({
+		render: ctx => renderCollapsible(ctx, 'ls -lh', false, true),
+	}),
+	'Running - simple command': defineComponentFixture({
+		render: ctx => renderCollapsible(ctx, 'ls -lh', false, false),
+	}),
+	'Ran sandbox - simple command': defineComponentFixture({
+		render: ctx => renderCollapsible(ctx, 'ls -lh', true, true),
+	}),
+	'Running sandbox - simple command': defineComponentFixture({
+		render: ctx => renderCollapsible(ctx, 'ls -lh', true, false),
+	}),
+	'Ran - special chars': defineComponentFixture({
+		render: ctx => renderCollapsible(ctx, 'grep -rn "hello" ./src --include="*.ts"', false, true),
+	}),
+	'Ran sandbox - special chars': defineComponentFixture({
+		render: ctx => renderCollapsible(ctx, 'grep -rn "hello" ./src --include="*.ts"', true, true),
+	}),
+	'Ran - backticks': defineComponentFixture({
+		render: ctx => renderCollapsible(ctx, 'echo `date` && echo `hostname`', false, true),
+	}),
+	'Ran sandbox - backticks': defineComponentFixture({
+		render: ctx => renderCollapsible(ctx, 'echo `date` && echo `hostname`', true, true),
+	}),
+	'Ran sandbox - powershell backticks': defineComponentFixture({
+		render: ctx => renderCollapsible(ctx, 'Get-Process | Where-Object {$_.Name -eq `"notepad`"}', true, true),
+	}),
+});
diff --git a/test/componentFixtures/.screenshots/baseline/chat/terminalCollapsible/chatTerminalCollapsible/Ran - backticks/Dark.png b/test/componentFixtures/.screenshots/baseline/chat/terminalCollapsible/chatTerminalCollapsible/Ran - backticks/Dark.png
new file mode 100644
index 00000000000..85c40d12f6b
--- /dev/null
+++ b/test/componentFixtures/.screenshots/baseline/chat/terminalCollapsible/chatTerminalCollapsible/Ran - backticks/Dark.png	
@@ -0,0 +1,3 @@
+version https://git-lfs.github.com/spec/v1
+oid sha256:0ae8dab0fa799afaadf186c93436bca9ac39c36b99b8f9846ed0d7284494be93
+size 2288
diff --git a/test/componentFixtures/.screenshots/baseline/chat/terminalCollapsible/chatTerminalCollapsible/Ran - backticks/Light.png b/test/componentFixtures/.screenshots/baseline/chat/terminalCollapsible/chatTerminalCollapsible/Ran - backticks/Light.png
new file mode 100644
index 00000000000..cfb849214ea
--- /dev/null
+++ b/test/componentFixtures/.screenshots/baseline/chat/terminalCollapsible/chatTerminalCollapsible/Ran - backticks/Light.png	
@@ -0,0 +1,3 @@
+version https://git-lfs.github.com/spec/v1
+oid sha256:89f27caedd1e45d22e90243691bcc0153195d121dc2c2bc58be4a1d50ace828f
+size 2229
diff --git a/test/componentFixtures/.screenshots/baseline/chat/terminalCollapsible/chatTerminalCollapsible/Ran - simple command/Dark.png b/test/componentFixtures/.screenshots/baseline/chat/terminalCollapsible/chatTerminalCollapsible/Ran - simple command/Dark.png
new file mode 100644
index 00000000000..539388c741b
--- /dev/null
+++ b/test/componentFixtures/.screenshots/baseline/chat/terminalCollapsible/chatTerminalCollapsible/Ran - simple command/Dark.png	
@@ -0,0 +1,3 @@
+version https://git-lfs.github.com/spec/v1
+oid sha256:793aa216b116d5b028adf16db5e8780f7b844bfbdd38657f943c6427de3e320b
+size 945
diff --git a/test/componentFixtures/.screenshots/baseline/chat/terminalCollapsible/chatTerminalCollapsible/Ran - simple command/Light.png b/test/componentFixtures/.screenshots/baseline/chat/terminalCollapsible/chatTerminalCollapsible/Ran - simple command/Light.png
new file mode 100644
index 00000000000..e2b960147c1
--- /dev/null
+++ b/test/componentFixtures/.screenshots/baseline/chat/terminalCollapsible/chatTerminalCollapsible/Ran - simple command/Light.png	
@@ -0,0 +1,3 @@
+version https://git-lfs.github.com/spec/v1
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+size 938
diff --git a/test/componentFixtures/.screenshots/baseline/chat/terminalCollapsible/chatTerminalCollapsible/Ran - special chars/Dark.png b/test/componentFixtures/.screenshots/baseline/chat/terminalCollapsible/chatTerminalCollapsible/Ran - special chars/Dark.png
new file mode 100644
index 00000000000..3b72ed4acaa
--- /dev/null
+++ b/test/componentFixtures/.screenshots/baseline/chat/terminalCollapsible/chatTerminalCollapsible/Ran - special chars/Dark.png	
@@ -0,0 +1,3 @@
+version https://git-lfs.github.com/spec/v1
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+size 2442
diff --git a/test/componentFixtures/.screenshots/baseline/chat/terminalCollapsible/chatTerminalCollapsible/Ran - special chars/Light.png b/test/componentFixtures/.screenshots/baseline/chat/terminalCollapsible/chatTerminalCollapsible/Ran - special chars/Light.png
new file mode 100644
index 00000000000..0abd61d3e4e
--- /dev/null
+++ b/test/componentFixtures/.screenshots/baseline/chat/terminalCollapsible/chatTerminalCollapsible/Ran - special chars/Light.png	
@@ -0,0 +1,3 @@
+version https://git-lfs.github.com/spec/v1
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+size 2359
diff --git a/test/componentFixtures/.screenshots/baseline/chat/terminalCollapsible/chatTerminalCollapsible/Ran sandbox - backticks/Dark.png b/test/componentFixtures/.screenshots/baseline/chat/terminalCollapsible/chatTerminalCollapsible/Ran sandbox - backticks/Dark.png
new file mode 100644
index 00000000000..a37c755179f
--- /dev/null
+++ b/test/componentFixtures/.screenshots/baseline/chat/terminalCollapsible/chatTerminalCollapsible/Ran sandbox - backticks/Dark.png	
@@ -0,0 +1,3 @@
+version https://git-lfs.github.com/spec/v1
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+size 3061
diff --git a/test/componentFixtures/.screenshots/baseline/chat/terminalCollapsible/chatTerminalCollapsible/Ran sandbox - backticks/Light.png b/test/componentFixtures/.screenshots/baseline/chat/terminalCollapsible/chatTerminalCollapsible/Ran sandbox - backticks/Light.png
new file mode 100644
index 00000000000..7d27474905c
--- /dev/null
+++ b/test/componentFixtures/.screenshots/baseline/chat/terminalCollapsible/chatTerminalCollapsible/Ran sandbox - backticks/Light.png	
@@ -0,0 +1,3 @@
+version https://git-lfs.github.com/spec/v1
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+size 2988
diff --git a/test/componentFixtures/.screenshots/baseline/chat/terminalCollapsible/chatTerminalCollapsible/Ran sandbox - powershell backticks/Dark.png b/test/componentFixtures/.screenshots/baseline/chat/terminalCollapsible/chatTerminalCollapsible/Ran sandbox - powershell backticks/Dark.png
new file mode 100644
index 00000000000..77d8e86be22
--- /dev/null
+++ b/test/componentFixtures/.screenshots/baseline/chat/terminalCollapsible/chatTerminalCollapsible/Ran sandbox - powershell backticks/Dark.png	
@@ -0,0 +1,3 @@
+version https://git-lfs.github.com/spec/v1
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+size 4476
diff --git a/test/componentFixtures/.screenshots/baseline/chat/terminalCollapsible/chatTerminalCollapsible/Ran sandbox - powershell backticks/Light.png b/test/componentFixtures/.screenshots/baseline/chat/terminalCollapsible/chatTerminalCollapsible/Ran sandbox - powershell backticks/Light.png
new file mode 100644
index 00000000000..04745d73624
--- /dev/null
+++ b/test/componentFixtures/.screenshots/baseline/chat/terminalCollapsible/chatTerminalCollapsible/Ran sandbox - powershell backticks/Light.png	
@@ -0,0 +1,3 @@
+version https://git-lfs.github.com/spec/v1
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diff --git a/test/componentFixtures/.screenshots/baseline/chat/terminalCollapsible/chatTerminalCollapsible/Ran sandbox - simple command/Dark.png b/test/componentFixtures/.screenshots/baseline/chat/terminalCollapsible/chatTerminalCollapsible/Ran sandbox - simple command/Dark.png
new file mode 100644
index 00000000000..9eb5f8b26b1
--- /dev/null
+++ b/test/componentFixtures/.screenshots/baseline/chat/terminalCollapsible/chatTerminalCollapsible/Ran sandbox - simple command/Dark.png	
@@ -0,0 +1,3 @@
+version https://git-lfs.github.com/spec/v1
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diff --git a/test/componentFixtures/.screenshots/baseline/chat/terminalCollapsible/chatTerminalCollapsible/Ran sandbox - simple command/Light.png b/test/componentFixtures/.screenshots/baseline/chat/terminalCollapsible/chatTerminalCollapsible/Ran sandbox - simple command/Light.png
new file mode 100644
index 00000000000..8abf08a2728
--- /dev/null
+++ b/test/componentFixtures/.screenshots/baseline/chat/terminalCollapsible/chatTerminalCollapsible/Ran sandbox - simple command/Light.png	
@@ -0,0 +1,3 @@
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diff --git a/test/componentFixtures/.screenshots/baseline/chat/terminalCollapsible/chatTerminalCollapsible/Ran sandbox - special chars/Dark.png b/test/componentFixtures/.screenshots/baseline/chat/terminalCollapsible/chatTerminalCollapsible/Ran sandbox - special chars/Dark.png
new file mode 100644
index 00000000000..975089fc9b6
--- /dev/null
+++ b/test/componentFixtures/.screenshots/baseline/chat/terminalCollapsible/chatTerminalCollapsible/Ran sandbox - special chars/Dark.png	
@@ -0,0 +1,3 @@
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new file mode 100644
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--- /dev/null
+++ b/test/componentFixtures/.screenshots/baseline/chat/terminalCollapsible/chatTerminalCollapsible/Ran sandbox - special chars/Light.png	
@@ -0,0 +1,3 @@
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diff --git a/test/componentFixtures/.screenshots/baseline/chat/terminalCollapsible/chatTerminalCollapsible/Running - simple command/Dark.png b/test/componentFixtures/.screenshots/baseline/chat/terminalCollapsible/chatTerminalCollapsible/Running - simple command/Dark.png
new file mode 100644
index 00000000000..263fa55733e
--- /dev/null
+++ b/test/componentFixtures/.screenshots/baseline/chat/terminalCollapsible/chatTerminalCollapsible/Running - simple command/Dark.png	
@@ -0,0 +1,3 @@
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diff --git a/test/componentFixtures/.screenshots/baseline/chat/terminalCollapsible/chatTerminalCollapsible/Running - simple command/Light.png b/test/componentFixtures/.screenshots/baseline/chat/terminalCollapsible/chatTerminalCollapsible/Running - simple command/Light.png
new file mode 100644
index 00000000000..04b6944c1a2
--- /dev/null
+++ b/test/componentFixtures/.screenshots/baseline/chat/terminalCollapsible/chatTerminalCollapsible/Running - simple command/Light.png	
@@ -0,0 +1,3 @@
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diff --git a/test/componentFixtures/.screenshots/baseline/chat/terminalCollapsible/chatTerminalCollapsible/Running sandbox - simple command/Dark.png b/test/componentFixtures/.screenshots/baseline/chat/terminalCollapsible/chatTerminalCollapsible/Running sandbox - simple command/Dark.png
new file mode 100644
index 00000000000..760ab24627d
--- /dev/null
+++ b/test/componentFixtures/.screenshots/baseline/chat/terminalCollapsible/chatTerminalCollapsible/Running sandbox - simple command/Dark.png	
@@ -0,0 +1,3 @@
+version https://git-lfs.github.com/spec/v1
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diff --git a/test/componentFixtures/.screenshots/baseline/chat/terminalCollapsible/chatTerminalCollapsible/Running sandbox - simple command/Light.png b/test/componentFixtures/.screenshots/baseline/chat/terminalCollapsible/chatTerminalCollapsible/Running sandbox - simple command/Light.png
new file mode 100644
index 00000000000..7f869c9bceb
--- /dev/null
+++ b/test/componentFixtures/.screenshots/baseline/chat/terminalCollapsible/chatTerminalCollapsible/Running sandbox - simple command/Light.png	
@@ -0,0 +1,3 @@
+version https://git-lfs.github.com/spec/v1
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