Not sure if this is related but...

In this case some of the workspace file and git metadata files were on a cloud drive (i.e., One Drive) which seemed to cause some conflicting access issues.

As mentioned, make sure and commit or stash any changes to avoid any lose

May also need to close and reopen any Visual Studio code terminals if in use.

From filesystem the .git/rebase-merge folder was deleted then git rebase --quit (or --abort) doesn't find it and then finished.