Unable to move Chat panel next to Terminal, yet UI allows it

To conserve space, I use 3 column layout: tree | editor | terminal
I want chat to be opened in the 3rd column. When I drag chat panel next to Terminal tab, UI seems to accept the placement, yet chat panel disappears and next time it opens up in 4th column.

Really annoying. In Standard VS Code it works no problem:

Ah, this seems to be possible via View > Appearance > Show Secondary Side Bar and move Terminal there instead.