Hey, thanks for the report. This is a known regression. The bug was fixed before, but it came back in version 2.3.41+.
Try this workaround:
CMD + Shift + P> “Preferences: Open User Settings (JSON)”- Add:
"workbench.sideBar.location": "right"
It doesn’t work for everyone, but it helps many users. Another option is CMD + Shift + P > “View: Toggle Primary Side Bar Position”, but it might reset after an update.
The team is aware. Here’s the main thread with lots of reports: Primary Side Bar forgets its position
Let me know if the workaround doesn’t help.