I ran into this too. I was able to work around it by switching the Jupyter extension to the pre-release version (which was a suggestion in a different question that I can't find anymore).
Answer from Alex Trzyna on Stack OverflowJupyter Notebook extension Visual Studio Code stuck "connecting to kernel" - Stack Overflow
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I ran into this too. I was able to work around it by switching the Jupyter extension to the pre-release version (which was a suggestion in a different question that I can't find anymore).
solved downgrading to previous version (November 2022) then updating to latest version again. Running same Python and Jupyter version. Good luck
It's not the Visual Studio Code update. I've been experimenting on a virtual machine, after my students started complaining this week that their Jupyter Notebooks stopped working...
I've tried downgrading Visual Studio Code, but that didn't solve the problem, so I started looking somewhere else.
As far as I know right now, the problem lies in the Jupyter-extension.
I have first disabled the Auto Update for the Jupyter-extension.
Next, I have downgraded the extension to version 2025.7.0, and it works again.
For good measure, I've then tried to update to version 2025.8.0: it also works.
But, when using version 2025.9.0: it breaks!
So what I would recommend:
In the Extensions-tab, disable Auto Update for the Jupyter extension.
Then use the Install Specific Version-menu to install version 2025.8.0.

After further testing:
The alternative is to Switch to Pre-Release Version, at least version 2025.10.2025101001. That also works.
UPDATE 2025-10-16:
Jupyter extension version 2025.9.1 has been released. This fixes the issue as well.
It seems to be an issue with the version 7.0.0 of the ipykernel python package. The jupyter notebook extension in vscode as well as the jupyter notebook in the browser get stuck in kernel connecting state when a cell is executed. On installing ipykernel==6.30.1, which is the version before 7.0.0, I don't face this issue in vscode or jupyter notebook in browser.
I have created an issue for the same: https://github.com/ipython/ipykernel/issues/1445
Hence I think we have to use ipykernel==6.30.1 until the issue is fixed. You can install it by running
pip install ipykernel==6.30.1
P.S.: ipykernel 7.0.1 has been released and it fixes this issue.