[Python] VSCode shows duplicate tests in Python

I don't know if this due to a recent update, but I am seeing my Python tests appear twice and when I am in test debug mode it runs twice as well. How can I fix this? I just created an empty project and I am running into the same issue.

Steps to reproduce:

1. 
   python -m venv .venv (create virtualenv)
   
   
2. 
   source ./.venv/bin/activate (activate virtualenv)
   
   
3. 
   pip install pytest==8.3.3
   
   
4. 
   On VSCode select Python interpreter to be the virtualenv one.
   
   
5. 
   mkdir server server/tests
   
   
6. 
   Basic tests file
   
   # server/tests/test_storage.py
   import pytest
   
   class TestStorage:
   def test(self):
   pass
7. 
   Settings.json (I tried different variations with the directory)
   
   {
   "python.testing.pytestArgs": [
   "tests"
   ],
   "python.testing.unittestEnabled": false,
   "python.testing.pytestEnabled": true
   }

VSCode Version: 1.94.0 (Universal)

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