diff --git a/src/vs/workbench/contrib/extensions/browser/extensionsActions.ts b/src/vs/workbench/contrib/extensions/browser/extensionsActions.ts
index a413f28b902..eaa5803d7ca 100644
--- a/src/vs/workbench/contrib/extensions/browser/extensionsActions.ts
+++ b/src/vs/workbench/contrib/extensions/browser/extensionsActions.ts
@@ -2111,21 +2111,27 @@ export class SystemDisabledWarningAction extends ExtensionAction {
 		}
 
 		if (isVirtualWorkspace(this.contextService.getWorkspace())) {
-			const virtualSupportType = this.extensionManifestPropertiesService.getExtensionVirtualWorkspaceSupportType(this.extension.local.manifest);
-			if (virtualSupportType !== true) {
+			if (this.extension.enablementState === EnablementState.DisabledByVirtualWorkspace) {
 				this.class = `${SystemDisabledWarningAction.INFO_CLASS}`;
-				const details = getWorkpaceSupportTypeMessage(this.extension.local.manifest.capabilities?.virtualWorkspaces);
-				this.tooltip = details || (virtualSupportType === 'limited' ?
-					localize('extension limited because of virtual workspace', "This extension has limited features because the current workspace is virtual.") :
-					localize('disabled because of virtual workspace', "This extension has been disabled because it does not support virtual workspaces."));
+				this.tooltip = localize('disabled because of virtual workspace', "This extension has been disabled because it does not support virtual workspaces.");
 				return;
 			}
+
+			const virtualSupportType = this.extensionManifestPropertiesService.getExtensionVirtualWorkspaceSupportType(this.extension.local.manifest);
+			const details = getWorkpaceSupportTypeMessage(this.extension.local.manifest.capabilities?.virtualWorkspaces);
+			if (virtualSupportType === 'limited' || details) {
+				this.class = `${SystemDisabledWarningAction.INFO_CLASS}`;
+				this.tooltip = localize('extension limited because of virtual workspace', "This extension has limited features because the current workspace is virtual.");
+			}
+			return;
 		}
+
 		if (this.extension.enablementState === EnablementState.DisabledByExtensionDependency) {
 			this.class = `${SystemDisabledWarningAction.WARNING_CLASS}`;
 			this.tooltip = localize('extension disabled because of dependency', "This extension has been disabled because it depends on an extension that is disabled.");
 			return;
 		}
+
 		if (this.extensionManagementServerService.localExtensionManagementServer && this.extensionManagementServerService.remoteExtensionManagementServer) {
 			if (isLanguagePackExtension(this.extension.local.manifest)) {
 				if (!this.extensionsWorkbenchService.installed.some(e => areSameExtensions(e.identifier, this.extension!.identifier) && e.server !== this.extension!.server)) {
@@ -2137,6 +2143,7 @@ export class SystemDisabledWarningAction extends ExtensionAction {
 				return;
 			}
 		}
+
 		if (this.extension.enablementState === EnablementState.DisabledByExtensionKind) {
 			if (!this.extensionsWorkbenchService.installed.some(e => areSameExtensions(e.identifier, this.extension!.identifier) && e.server !== this.extension!.server)) {
 				const server = this.extensionManagementServerService.localExtensionManagementServer === this.extension.server ? this.extensionManagementServerService.remoteExtensionManagementServer : this.extensionManagementServerService.localExtensionManagementServer;
@@ -2149,6 +2156,7 @@ export class SystemDisabledWarningAction extends ExtensionAction {
 				return;
 			}
 		}
+
 		if (this.extensionManagementServerService.localExtensionManagementServer && this.extensionManagementServerService.remoteExtensionManagementServer) {
 			const runningExtension = this._runningExtensions.filter(e => areSameExtensions({ id: e.identifier.value, uuid: e.uuid }, this.extension!.identifier))[0];
 			const runningExtensionServer = runningExtension ? this.extensionManagementServerService.getExtensionManagementServer(toExtension(runningExtension)) : null;
@@ -2167,6 +2175,7 @@ export class SystemDisabledWarningAction extends ExtensionAction {
 				return;
 			}
 		}
+
 		if (this.workspaceTrustService.workspaceTrustEnabled && !this.workspaceTrustService.isWorkpaceTrusted() && this.extension.enablementState === EnablementState.DisabledByTrustRequirement) {
 			const untrustedSupportType = this.extensionManifestPropertiesService.getExtensionUntrustedWorkspaceSupportType(this.extension.local.manifest);
 			const untrustedDetails = getWorkpaceSupportTypeMessage(this.extension.local.manifest.capabilities?.untrustedWorkspaces);
diff --git a/src/vs/workbench/services/extensionManagement/browser/extensionEnablementService.ts b/src/vs/workbench/services/extensionManagement/browser/extensionEnablementService.ts
index df282fc698c..a66ae83d241 100644
--- a/src/vs/workbench/services/extensionManagement/browser/extensionEnablementService.ts
+++ b/src/vs/workbench/services/extensionManagement/browser/extensionEnablementService.ts
@@ -278,10 +278,22 @@ export class ExtensionEnablementService extends Disposable implements IWorkbench
 	}
 
 	private _isDisabledByVirtualWorkspace(extension: IExtension): boolean {
-		if (isVirtualWorkspace(this.contextService.getWorkspace())) {
-			return this.extensionManifestPropertiesService.getExtensionVirtualWorkspaceSupportType(extension.manifest) === false;
+		// Not a virtual workspace
+		if (!isVirtualWorkspace(this.contextService.getWorkspace())) {
+			return false;
 		}
-		return false;
+
+		// Supports virtual workspace
+		if (this.extensionManifestPropertiesService.getExtensionVirtualWorkspaceSupportType(extension.manifest) !== false) {
+			return false;
+		}
+
+		// Web extension from web extension management server
+		if (this.extensionManagementServerService.getExtensionManagementServer(extension) === this.extensionManagementServerService.webExtensionManagementServer && this.extensionManifestPropertiesService.canExecuteOnWeb(extension.manifest)) {
+			return false;
+		}
+
+		return true;
 	}
 
 	private _isDisabledByExtensionKind(extension: IExtension): boolean {
diff --git a/src/vs/workbench/services/extensionManagement/test/browser/extensionEnablementService.test.ts b/src/vs/workbench/services/extensionManagement/test/browser/extensionEnablementService.test.ts
index f3ab9b6b9dd..d78178e6a17 100644
--- a/src/vs/workbench/services/extensionManagement/test/browser/extensionEnablementService.test.ts
+++ b/src/vs/workbench/services/extensionManagement/test/browser/extensionEnablementService.test.ts
@@ -505,6 +505,24 @@ suite('ExtensionEnablementService Test', () => {
 		assert.deepStrictEqual(testObject.getEnablementState(extension), EnablementState.DisabledByVirtualWorkspace);
 	});
 
+	test('test web extension from web extension management server and does not support vitrual workspace is enabled in virtual workspace', async () => {
+		instantiationService.stub(IExtensionManagementServerService, anExtensionManagementServerService(null, anExtensionManagementServer('vscode-remote', instantiationService), anExtensionManagementServer('web', instantiationService)));
+		const extension = aLocalExtension2('pub.a', { capabilities: { virtualWorkspaces: false }, browser: 'browser.js' }, { location: URI.file(`pub.a`).with({ scheme: 'web' }) });
+		instantiationService.stub(IWorkspaceContextService, 'getWorkspace', <IWorkspace>{ folders: [{ uri: URI.file('worskapceA').with(({ scheme: 'virtual' })) }] });
+		testObject = new TestExtensionEnablementService(instantiationService);
+		assert.ok(testObject.isEnabled(extension));
+		assert.deepStrictEqual(testObject.getEnablementState(extension), EnablementState.EnabledGlobally);
+	});
+
+	test('test web extension from remote extension management server and does not support vitrual workspace is disabled in virtual workspace', async () => {
+		instantiationService.stub(IExtensionManagementServerService, anExtensionManagementServerService(null, anExtensionManagementServer('vscode-remote', instantiationService), anExtensionManagementServer('web', instantiationService)));
+		const extension = aLocalExtension2('pub.a', { capabilities: { virtualWorkspaces: false }, browser: 'browser.js' }, { location: URI.file(`pub.a`).with({ scheme: 'vscode-remote' }) });
+		instantiationService.stub(IWorkspaceContextService, 'getWorkspace', <IWorkspace>{ folders: [{ uri: URI.file('worskapceA').with(({ scheme: 'virtual' })) }] });
+		testObject = new TestExtensionEnablementService(instantiationService);
+		assert.ok(!testObject.isEnabled(extension));
+		assert.deepStrictEqual(testObject.getEnablementState(extension), EnablementState.DisabledByVirtualWorkspace);
+	});
+
 	test('test canChangeEnablement return false when extension is disabled in virtual workspace', () => {
 		const extension = aLocalExtension2('pub.a', { capabilities: { virtualWorkspaces: false } });
 		instantiationService.stub(IWorkspaceContextService, 'getWorkspace', <IWorkspace>{ folders: [{ uri: URI.file('worskapceA').with(({ scheme: 'virtual' })) }] });