diff --git a/src/features/interpreterSelection.ts b/src/features/interpreterSelection.ts
index a9bc179e..d5780b69 100644
--- a/src/features/interpreterSelection.ts
+++ b/src/features/interpreterSelection.ts
@@ -107,20 +107,32 @@ async function resolvePriorityChainCore(
     const userInterpreterPath = getUserConfiguredSetting<string>('python', 'defaultInterpreterPath', scope);
     if (userInterpreterPath) {
         const expandedInterpreterPath = resolveVariables(userInterpreterPath, scope);
-        const resolved = await tryResolveInterpreterPath(nativeFinder, api, expandedInterpreterPath, envManagers);
-        if (resolved) {
-            traceVerbose(`${logPrefix} Priority 3: Using defaultInterpreterPath: ${userInterpreterPath}`);
-            return { result: resolved, errors };
+        if (expandedInterpreterPath.includes('${')) {
+            traceWarn(
+                `${logPrefix} defaultInterpreterPath '${userInterpreterPath}' contains unresolved variables, falling back to auto-discovery`,
+            );
+            const error: SettingResolutionError = {
+                setting: 'defaultInterpreterPath',
+                configuredValue: userInterpreterPath,
+                reason: l10n.t('Path contains unresolved variables'),
+            };
+            errors.push(error);
+        } else {
+            const resolved = await tryResolveInterpreterPath(nativeFinder, api, expandedInterpreterPath, envManagers);
+            if (resolved) {
+                traceVerbose(`${logPrefix} Priority 3: Using defaultInterpreterPath: ${userInterpreterPath}`);
+                return { result: resolved, errors };
+            }
+            const error: SettingResolutionError = {
+                setting: 'defaultInterpreterPath',
+                configuredValue: userInterpreterPath,
+                reason: `Could not resolve interpreter path '${userInterpreterPath}'`,
+            };
+            errors.push(error);
+            traceWarn(
+                `${logPrefix} defaultInterpreterPath '${userInterpreterPath}' unresolvable, falling back to auto-discovery`,
+            );
         }
-        const error: SettingResolutionError = {
-            setting: 'defaultInterpreterPath',
-            configuredValue: userInterpreterPath,
-            reason: `Could not resolve interpreter path '${userInterpreterPath}'`,
-        };
-        errors.push(error);
-        traceWarn(
-            `${logPrefix} defaultInterpreterPath '${userInterpreterPath}' unresolvable, falling back to auto-discovery`,
-        );
     }
 
     // PRIORITY 4: Auto-discovery (no user-configured settings matched)
diff --git a/src/managers/common/nativePythonFinder.ts b/src/managers/common/nativePythonFinder.ts
index efdfb246..33f690e7 100644
--- a/src/managers/common/nativePythonFinder.ts
+++ b/src/managers/common/nativePythonFinder.ts
@@ -842,6 +842,15 @@ function getGlobalSearchPaths(): string[] {
     }
 }
 
+let workspaceSearchPathsGlobalWarningShown = false;
+
+/**
+ * @internal Test-only helper to reset the workspaceSearchPaths global-level warning flag.
+ */
+export function resetWorkspaceSearchPathsGlobalWarningFlag(): void {
+    workspaceSearchPathsGlobalWarningShown = false;
+}
+
 /**
  * Gets the most specific workspace-level setting available for workspaceSearchPaths.
  * Supports glob patterns which are expanded by PET.
@@ -851,7 +860,8 @@ function getWorkspaceSearchPaths(): string[] {
         const envConfig = getConfiguration('python-envs');
         const inspection = envConfig.inspect<string[]>('workspaceSearchPaths');
 
-        if (inspection?.globalValue) {
+        if (inspection?.globalValue && !workspaceSearchPathsGlobalWarningShown) {
+            workspaceSearchPathsGlobalWarningShown = true;
             traceError(
                 'python-envs.workspaceSearchPaths is set at the user/global level, but this setting can only be set at the workspace or workspace folder level.',
             );
diff --git a/src/test/features/interpreterSelection.unit.test.ts b/src/test/features/interpreterSelection.unit.test.ts
index 4c5fcbf3..f223a202 100644
--- a/src/test/features/interpreterSelection.unit.test.ts
+++ b/src/test/features/interpreterSelection.unit.test.ts
@@ -264,6 +264,36 @@ suite('Interpreter Selection - Priority Chain', () => {
             assert.ok(mockNativeFinder.resolve.calledOnceWithExactly(expandedInterpreterPath));
         });
 
+        test('should skip native resolution when defaultInterpreterPath has unresolved variables', async () => {
+            // When resolveVariables can't resolve ${workspaceFolder} (e.g., global scope with no workspace),
+            // the path still contains '${' and should be skipped without calling nativeFinder.resolve
+            sandbox.stub(workspaceApis, 'getConfiguration').returns(createMockConfig([]) as WorkspaceConfiguration);
+            sandbox.stub(workspaceApis, 'getWorkspaceFolders').returns([]);
+            sandbox.stub(workspaceApis, 'getWorkspaceFolder').returns(undefined);
+            sandbox.stub(helpers, 'getUserConfiguredSetting').callsFake((section: string, key: string) => {
+                if (section === 'python' && key === 'defaultInterpreterPath') {
+                    return '${workspaceFolder}/.venv/bin/python3';
+                }
+                return undefined;
+            });
+            mockVenvManager.get.resolves(mockVenvEnv);
+
+            const result = await resolveEnvironmentByPriority(
+                testUri,
+                mockEnvManagers as unknown as EnvironmentManagers,
+                mockProjectManager as unknown as PythonProjectManager,
+                mockNativeFinder as unknown as NativePythonFinder,
+                mockApi as unknown as PythonEnvironmentApi,
+            );
+
+            // Should fall through to auto-discovery without calling nativeFinder.resolve
+            assert.strictEqual(result.source, 'autoDiscovery');
+            assert.ok(
+                mockNativeFinder.resolve.notCalled,
+                'nativeFinder.resolve should not be called with unresolved variables',
+            );
+        });
+
         test('should fall through to Priority 4 when defaultInterpreterPath cannot be resolved', async () => {
             sandbox.stub(workspaceApis, 'getConfiguration').returns(createMockConfig([]) as WorkspaceConfiguration);
             sandbox.stub(workspaceApis, 'getWorkspaceFolders').returns([]);
diff --git a/src/test/managers/common/nativePythonFinder.getAllExtraSearchPaths.unit.test.ts b/src/test/managers/common/nativePythonFinder.getAllExtraSearchPaths.unit.test.ts
index 43a7fe63..6159fdc2 100644
--- a/src/test/managers/common/nativePythonFinder.getAllExtraSearchPaths.unit.test.ts
+++ b/src/test/managers/common/nativePythonFinder.getAllExtraSearchPaths.unit.test.ts
@@ -6,7 +6,7 @@ import * as pathUtils from '../../../common/utils/pathUtils';
 import * as workspaceApis from '../../../common/workspace.apis';
 
 // Import the function under test
-import { getAllExtraSearchPaths } from '../../../managers/common/nativePythonFinder';
+import { getAllExtraSearchPaths, resetWorkspaceSearchPathsGlobalWarningFlag } from '../../../managers/common/nativePythonFinder';
 
 interface MockWorkspaceConfig {
     get: sinon.SinonStub;
@@ -26,6 +26,8 @@ suite('getAllExtraSearchPaths Integration Tests', () => {
     let envConfig: MockWorkspaceConfig;
 
     setup(() => {
+        resetWorkspaceSearchPathsGlobalWarningFlag();
+
         // Mock VS Code workspace APIs
         mockGetConfiguration = sinon.stub(workspaceApis, 'getConfiguration');
         mockGetWorkspaceFolders = sinon.stub(workspaceApis, 'getWorkspaceFolders');
@@ -87,6 +89,7 @@ suite('getAllExtraSearchPaths Integration Tests', () => {
 
     teardown(() => {
         sinon.restore();
+        resetWorkspaceSearchPathsGlobalWarningFlag();
     });
 
     suite('Legacy Path Consolidation Tests', () => {
@@ -332,6 +335,33 @@ suite('getAllExtraSearchPaths Integration Tests', () => {
             );
         });
 
+        test('Global workspace setting warning is only logged once across multiple calls', async () => {
+            // Mock → Workspace setting incorrectly set at global level
+            pythonConfig.get.withArgs('venvPath').returns(undefined);
+            pythonConfig.get.withArgs('venvFolders').returns(undefined);
+            envConfig.inspect.withArgs('globalSearchPaths').returns({ globalValue: [] });
+            envConfig.inspect.withArgs('workspaceSearchPaths').returns({
+                globalValue: ['should-be-ignored'],
+            });
+
+            // Run multiple times
+            await getAllExtraSearchPaths();
+            await getAllExtraSearchPaths();
+            await getAllExtraSearchPaths();
+
+            // Assert - error should only be logged once, not three times
+            const matchingCalls = mockTraceError
+                .getCalls()
+                .filter((call: sinon.SinonSpyCall) =>
+                    /workspaceSearchPaths.*global.*level/i.test(String(call.args[0])),
+                );
+            assert.strictEqual(
+                matchingCalls.length,
+                1,
+                `Expected exactly 1 error about workspaceSearchPaths global level, got ${matchingCalls.length}`,
+            );
+        });
+
         test('Configuration read errors return empty arrays', async () => {
             // Mock → Configuration throws errors
             pythonConfig.get.withArgs('venvPath').returns(undefined);