Git has a 10k quota changes on your working directory. This means Git cannot do its thing beyond 10k changes for every commit. When you delete a folder with lots of files, chances are you will reach that quota. For instance, I deleted a series of directories within the main directory which triggered 1,747,391 deletions. I do not know exactly how this translate in terms of Git changes but it was over 10k because of that as shown here:

Then this problem was fixed by itself after 10 commits. In VS Code, if you let your mouse over the commit history item it will show you that information.

Now everything is clean and back to normal.