I set my Proxy Log Directory to C:\Users\micha\logs in settings.

Then, when connecting to a workspace, I get:

[17:15:11.240] > vdollar_percent_expand: unknown key %3
> percent_expand: failed
> The process tried to write to a nonexistent pipe.

in ~.ssh\config I see that this is rendered: --log-dir C%3A%5CUsers%5Cmicha%5Clogs which is presumably what OpenSSH is choking on.