This isn't the first Mermaid prompt injection exfiltration we've seen - here's one from August that was reported by Johann Rehberger against Cursor (and fixed by them): https://embracethered.com/blog/posts/2025/cursor-data-exfilt...
That's mentioned in the linked post. Looks like that attack was different - Cursor's Mermaid implementation could render external images, but Copilot's doesn't let you do that so you need to trick users with a fake Login button that activates a hyperlink instead.