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There seems to be some bug in VS Code, I exited ZenMode and can see gutter on both side of VS Code. This is making my coding area small and I am not able to remove it. Can someone please help me here

This happened with me earlier also, I had to reinstall VS Code, But can't do it every now and then. So need a permanent solution.

Please refer to red marked area in image below.

Note: I have tried basic troubleshooting like restarting, removing themes, removing all settings etc. I also tried solutions mentioned below, but those are not the gutters I am referring to

How can you disable Gutter Indicators in VS Code?

How do I change the Gutter Width in VS Code?

Answers

Edit

Obviously I missunderstood your question. You want to turn off that behaviour when you are not in zen mode. To do so press F1 and execute the command View: Toggle Centered Layout. I found the answer in one of VS Code's issues.

To turn off the centered layout in zen mode read the original answer.

Original answer

In your settings turn off the center layout for zen mode by unchecking the setting Zen Mode: Center Layout or if you prefer the json settings set

{
    "zenMode.centerLayout": false
}

Now there won't be any space between the activity bar and the first editor tab.

Screenshot: