diff --git a/src/vs/workbench/services/configuration/browser/configurationService.ts b/src/vs/workbench/services/configuration/browser/configurationService.ts
index d9491186439..a9813b52755 100644
--- a/src/vs/workbench/services/configuration/browser/configurationService.ts
+++ b/src/vs/workbench/services/configuration/browser/configurationService.ts
@@ -47,6 +47,8 @@ import { IBrowserWorkbenchEnvironmentService } from '../../environment/browser/e
 import { workbenchConfigurationNodeBase } from '../../../common/configuration.js';
 import { mainWindow } from '../../../../base/browser/window.js';
 import { runWhenWindowIdle } from '../../../../base/browser/dom.js';
+import { renderAsPlaintext } from '../../../../base/browser/markdownRenderer.js';
+import { fixSettingLinks } from '../../preferences/common/preferencesModels.js';
 
 function getLocalUserConfigurationScopes(userDataProfile: IUserDataProfile, hasRemote: boolean): ConfigurationScope[] | undefined {
 	const isDefaultProfile = userDataProfile.isDefault || userDataProfile.useDefaultFlags?.settings;
@@ -1176,6 +1178,15 @@ class RegisterConfigurationSchemasContribution extends Disposable implements IWo
 	}
 
 	private registerConfigurationSchemas(): void {
+		// Ensure deprecationMessage is plain text for properties where it was derived from
+		// markdownDeprecationMessage, since the JSON editor diagnostics don't support markdown.
+		for (const key of Object.keys(allSettings.properties)) {
+			const prop = allSettings.properties[key];
+			if (prop.markdownDeprecationMessage && prop.deprecationMessage === prop.markdownDeprecationMessage) {
+				prop.deprecationMessage = renderAsPlaintext({ value: fixSettingLinks(prop.markdownDeprecationMessage) });
+			}
+		}
+
 		const allSettingsSchema: IJSONSchema = {
 			properties: allSettings.properties,
 			patternProperties: allSettings.patternProperties,
diff --git a/src/vs/workbench/services/preferences/common/preferencesModels.ts b/src/vs/workbench/services/preferences/common/preferencesModels.ts
index 84fa12bc44d..1d399cefc95 100644
--- a/src/vs/workbench/services/preferences/common/preferencesModels.ts
+++ b/src/vs/workbench/services/preferences/common/preferencesModels.ts
@@ -28,6 +28,14 @@ import { isString } from '../../../../base/common/types.js';
 export const nullRange: IRange = { startLineNumber: -1, startColumn: -1, endLineNumber: -1, endColumn: -1 };
 function isNullRange(range: IRange): boolean { return range.startLineNumber === -1 && range.startColumn === -1 && range.endLineNumber === -1 && range.endColumn === -1; }
 
+/**
+ * Strips VS Code's custom `#settingId#` link syntax from a markdown string so the setting key
+ * remains as inline code (e.g. `` `settingId` ``). Useful for contexts that don't render markdown links.
+ */
+export function fixSettingLinks(text: string): string {
+	return text.replace(/`#([^#`]*)#`/g, (_, settingName) => `\`${settingName}\``);
+}
+
 abstract class AbstractSettingsModel extends EditorModel {
 
 	protected _currentResultGroups = new Map<string, ISearchResultGroup>();
@@ -1072,13 +1080,11 @@ class SettingsContentBuilder {
 	}
 
 	private pushSettingDescription(setting: ISetting, indent: string): void {
-		const fixSettingLink = (line: string) => line.replace(/`#(.*)#`/g, (match, settingName) => `\`${settingName}\``);
-
 		setting.descriptionRanges = [];
 		const descriptionPreValue = indent + '// ';
 		const deprecationMessageLines = setting.deprecationMessage?.split(/\n/g) ?? [];
 		for (let line of [...deprecationMessageLines, ...setting.description]) {
-			line = fixSettingLink(line);
+			line = fixSettingLinks(line);
 
 			this._contentByLines.push(descriptionPreValue + line);
 			setting.descriptionRanges.push({ startLineNumber: this.lineCountWithOffset, startColumn: this.lastLine.indexOf(line) + 1, endLineNumber: this.lineCountWithOffset, endColumn: this.lastLine.length });
@@ -1088,7 +1094,7 @@ class SettingsContentBuilder {
 			setting.enumDescriptions.forEach((desc, i) => {
 				const displayEnum = escapeInvisibleChars(String(setting.enum![i]));
 				const line = desc ?
-					`${displayEnum}: ${fixSettingLink(desc)}` :
+					`${displayEnum}: ${fixSettingLinks(desc)}` :
 					displayEnum;
 
 				const lines = line.split(/\n/g);