What are 'File Create' participants in vscode?

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I tried to create a README.md file inside an empty directory in vscode and I got a text saying

"Running 'File Create' participants..."

which I had to cancel after a while before seeing my file. It is probably a vscode issue but this is another story.

I also saw the following related setting in vscode:

// Timeout in milliseconds after which file participants for create, rename, and delete are cancelled. Use `0` to disable participants.
  "files.participants.timeout": 60000,

My question is: What are Participants?

Does the above expression translate to "Running 'File Create' event handlers"? If yes, how does "Participants" differentiate from Handlers? (or is it more close to Observers/Listeners?)

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