I have actually done exactly that (because we were working on multiple repos at once but sharing a new repo on LiveShare while a session is on disconnects everyone..)
If you open a new Live Share session with a folder of code let's say, and then you want to add another folder to the workspace, this disconnects everyone and ends the session. I've reproduced it multiple times.
Ah OK got it, yeah that's a known limitation. That's something we plan to add support for very soon. Apologies for the current inconvenience!