diff --git a/src/vs/workbench/api/common/extHostTerminalService.ts b/src/vs/workbench/api/common/extHostTerminalService.ts
index d91e8fe990fb1..371eace01f7c8 100644
--- a/src/vs/workbench/api/common/extHostTerminalService.ts
+++ b/src/vs/workbench/api/common/extHostTerminalService.ts
@@ -965,22 +965,25 @@ class UnifiedEnvironmentVariableCollection {
 		}
 		const key = this.getKey(variable, mutator.scope);
 		const current = this.map.get(key);
+		const newOptions = mutator.options ? {
+			applyAtProcessCreation: mutator.options.applyAtProcessCreation ?? false,
+			applyAtShellIntegration: mutator.options.applyAtShellIntegration ?? false,
+		} : {
+			applyAtProcessCreation: true
+		};
 		if (
 			!current ||
 			current.value !== mutator.value ||
 			current.type !== mutator.type ||
-			current.options?.applyAtProcessCreation !== (mutator.options.applyAtProcessCreation ?? true) ||
-			current.options?.applyAtShellIntegration !== (mutator.options.applyAtShellIntegration ?? false) ||
+			current.options?.applyAtProcessCreation !== newOptions.applyAtProcessCreation ||
+			current.options?.applyAtShellIntegration !== newOptions.applyAtShellIntegration ||
 			current.scope?.workspaceFolder?.index !== mutator.scope?.workspaceFolder?.index
 		) {
 			const key = this.getKey(variable, mutator.scope);
 			const value: IEnvironmentVariableMutator = {
 				variable,
 				...mutator,
-				options: {
-					applyAtProcessCreation: mutator.options.applyAtProcessCreation ?? true,
-					applyAtShellIntegration: mutator.options.applyAtShellIntegration ?? false,
-				}
+				options: newOptions
 			};
 			this.map.set(key, value);
 			this._onDidChangeCollection.fire();
diff --git a/src/vscode-dts/vscode.proposed.envCollectionOptions.d.ts b/src/vscode-dts/vscode.proposed.envCollectionOptions.d.ts
index d25a92725a4dd..9a854922a2d3f 100644
--- a/src/vscode-dts/vscode.proposed.envCollectionOptions.d.ts
+++ b/src/vscode-dts/vscode.proposed.envCollectionOptions.d.ts
@@ -13,16 +13,12 @@ declare module 'vscode' {
 	export interface EnvironmentVariableMutatorOptions {
 		/**
 		 * Apply to the environment just before the process is created.
-		 *
-		 * Defaults to true.
 		 */
 		applyAtProcessCreation?: boolean;
 
 		/**
 		 * Apply to the environment in the shell integration script. Note that this _will not_ apply
 		 * the mutator if shell integration is disabled or not working for some reason.
-		 *
-		 * Defaults to false.
 		 */
 		applyAtShellIntegration?: boolean;
 	}
@@ -32,24 +28,27 @@ declare module 'vscode' {
 	 */
 	export interface EnvironmentVariableMutator {
 		/**
-		 * Options applied to the mutator.
+		 * Options applied to the mutator
 		 */
 		readonly options: EnvironmentVariableMutatorOptions;
 	}
 
 	export interface EnvironmentVariableCollection extends Iterable<[variable: string, mutator: EnvironmentVariableMutator]> {
 		/**
-		 * @param options Options applied to the mutator.
+		 * @param options Options applied to the mutator, when not options are provided this will
+		 * default to `{ applyAtProcessCreation: true }`
 		 */
 		replace(variable: string, value: string, options?: EnvironmentVariableMutatorOptions): void;
 
 		/**
-		 * @param options Options applied to the mutator.
+		 * @param options Options applied to the mutator, when not options are provided this will
+		 * default to `{ applyAtProcessCreation: true }`
 		 */
 		append(variable: string, value: string, options?: EnvironmentVariableMutatorOptions): void;
 
 		/**
-		 * @param options Options applied to the mutator.
+		 * @param options Options applied to the mutator, when not options are provided this will
+		 * default to `{ applyAtProcessCreation: true }`
 		 */
 		prepend(variable: string, value: string, options?: EnvironmentVariableMutatorOptions): void;
 	}