Option "Run in terminal" & "Start debugging of Startup Project" stopped working after update that embedded terminal in QtCreator panel.

After I performed an update to my system about a month ago, Qtcreator was updated, the most noticeable change being that the terminal now embeds like so:

However when trying to run the debugger:

It fails to launch. 

Disabling the "Run in Terminal" allows the debugger to run:

This was never prior an issue, and it does not seem to be related to the build system, as the same behaviour is experienced on both fresh QBS & QMake projects. 

The reason why its an annoyance, is because one of my libraries uses terminal commands that do not work with with the normal output window.