NonSourceTrackedOrgError: This org does not have source tracking when using "Retrieve Source from Org" on Sandbox/Developer org

[saikatghosh-eng]

Summary

When I try to use SFDX: Retrieve Source from Org on a Sandbox or Developer org, it always fails with this error:

NonSourceTrackedOrgError: This org does not have source tracking.

Steps to Reproduce

1. Connect to a Sandbox or Developer org (not a scratch org)
2. Set it as the default org
3. Right-click a file → click SFDX: Retrieve Source from Org
4. The error appears

Expected Result

The retrieve command should work normally for Sandbox/Developer orgs.

Actual Result

The command fails every time with:
NonSourceTrackedOrgError: This org does not have source tracking.

Environment

• Salesforce Extensions Version: 66.8.0
• SF CLI Version: 2.131.7
• OS: Windows 10
• Org Type: Sandbox / Developer

[saikatghosh-eng]

This should be treated as a high-priority issue. Many developers are facing this problem across multiple orgs and devices, making the “Retrieve Source from Org” feature unusable in Sandbox and Developer environments.

[svc-idee-bot]

Thank you for filing this issue. We appreciate your feedback and will review the issue as soon as possible. Remember, however, that GitHub isn't a mechanism for receiving support under any agreement or SLA. If you require immediate assistance, contact Salesforce Customer Support.

[mshanemc]

before you do the workaround below, can you check something in the CLI's auth file?

if you cat ~/.sfdx/<username>.json,
is there a tracksSource on the file? Is it true or false?

can you try running sf org disable tracking on that org? (it sets that field to false)
[not that you should have to do this, but it might get you unstuck and also help diagnose where the error is coming from]

update: I've tried with a developer edition and a sandbox and can't reproduce it.