Where is the VS Code runner looking? It would be helpful to know how you're calling it in CLI as well.

It kind of sounds to me like VS Code is considering workspace/ to be the root of the project, so the pom.xml only works correctly when it's effectively serving as the POM for workspace/.

Somehow, the IDE doesn't consider Repo 1/ as its own maven project. When you test in CLI, which directory are you calling mvn test? Are you calling it from Repo 1/?