Revisit outputLocation setting values

[Tyriar]

When #271390 is done, we should look at the setting to see what values make the most sense.

• none or hidden in particular may not be valid?
• Is auto expanding here or a different setting?

[meganrogge]

I think this setting is still valid, though we'll want to move to 100% none by default now. I think the setting for expansion should be different. I'll make an issue for that.

[Tyriar]

My original thinking was "terminal" | "none" (no auto expand) | "chat" (auto expand). We're still chatting about the auto-expand behavior but it makes sense to keep it out of this setting imo.

Can we change to "terminal" | "chat" (default)? With some basic migration for "none", when the default is "chat" the migration isn't so important since "chat" would be the default.