Fix VS LiveShare extensions using completely new install. This is a more aggressive, hard reset than just uninstalling and reinstalling because it also recursively deletes the extension cache and global storage directories before reinstalling.

repairVSLiveShare.ps1

# Get the VS Code batch script 
$vsCodeCmd = Get-Command -Name code*cmd -CommandType Application -TotalCount 1

# Verify code sign
$vsCodeExe = Resolve-Path "$(Join-Path ($vsCodeCmd|  Get-Item).Directory '..')\Code*.exe"
if( $null -eq $vsCodeExe -or ((Get-AuthenticodeSignature -FilePath $vsCodeExe -ErrorAction Stop).Status -ne [System.Management.Automation.SignatureStatus]::Valid)){
 throw "Could not find valid VS Code Executable."
}

# Collect all the liveshare extensions
$liveShareExts = (&($vsCodeCmd) @('--list-extensions') | Where-Object -FilterScript { $_ -match 'vsliveshare' })

# If liveshare isn't installed (e.g., if this script were run twice in a row), just install the liveshare extension
if (($null -eq $liveShareExts) -and ($null -ne $vsCodeCmd)) {
    &($vsCodeCmd) --install-extension 'ms-vsliveshare.vsliveshare' 
} else { # Uninstall extension and remove associated extension folders, files
    foreach ($liveShareExt in $liveShareExts) {
        &($vsCodeCmd) --uninstall-extension $liveShareExt
        if ($null -ne ($pathToRemove = Resolve-Path "$env:USERPROFILE\.vscode*\extensions\$liveShareExt*\" -ErrorAction Stop) -and (Test-Path $pathToRemove -PathType Container )) {
            Remove-Item -Path $pathToRemove -Recurse -Confirm -ErrorAction Ignore 
        }
        if ($null -ne ($pathToRemove = Resolve-Path "$env:APPDATA\Code*\User\globalStorage\$liveShareExt\" -ErrorAction Stop) -and (Test-Path $pathToRemove -PathType Container) ) {
            Remove-Item -Path $pathToRemove -Recurse -Confirm -ErrorAction Ignore 
        }
        
        # Reinstall the extension
        &($vsCodeCmd) --install-extension $liveShareExt
    } 
}

If you are persistently having this issue (i.e., repeatedly resorting to using this script), it may indicate that your hard drive is failing or there is some other process corrupting the files associated with the vsliveshare extensions.