When you get asked to select a Python interpreter via Create Environment where you only have one or two interpreters, the list gets overwhelmed by the "Enter Interpreter Path" entry (are people even using it that much for Create Environment?), and if you have python.defaultInterpreterPath set then a majority of your entries now have a codicon.
We may want to re-evaluate what we show, both in Create Environment and in general, based on what people are actually using and from a perspective of Create Environment being a convenience.