This appears to be a recent bug in VSCode https://github.com/microsoft/vscode/issues/277174.

The second column is the "Terminal Tabs View" and should be hidden if only one terminal is open.

As a workaround you can drag-and-drop the Terminal Tabs Vew to another location be hidden again. After the first drag operation it remains hidden thereafter.

Thanks to jonsharpe for pointing me in the right direction.