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There are two

If you come from VS Code, the is swapped. There, ⌘⇧P is the command palette. Here ⌘⇧P is the sessions one — the actions palette is plain ⌘P.
It’s the same dialog with two modes. At the top there are two buttons — Actions and Sessions — each with its own shortcut next to it. You can switch modes with a click, without closing. The magnifying-glass icon in the header opens the actions palette. Typing filters. With no match, it says No results.

The actions palette

⌘P / Ctrl+Shift+P. Four groups.

Actions

Close pane only appears when there’s an active workspace. With nothing open, there’s no pane to close.

Theme

See the themes and import a theme.

Interface font

Switch font to — the active font doesn’t show.

Language

Switch language to — the active language doesn’t show.
The pattern across the groups is the same: whatever is already in effect disappears from the list. The palette only offers change.

The sessions palette

⌘⇧P / Ctrl+Alt+Shift+P. Despite the name, it lists workspaces — not shells. Each row carries the name, a green icon if it’s the active one, and the tab count on the right. The search matches the name, the repository path and the id. Searching by folder works even when the workspace was renamed. goes to the workspace. It’s the fastest path when the ⌘⇧↑ / ⌘⇧↓ cycle got too long — see tabs and workspaces.
With no workspace open, the Sessions mode is empty.

What the palette doesn’t have

The palette is not an index of everything the app does. It covers a handful of actions and navigation between workspaces — the rest lives in the context menu, the header and Settings.

See also

Shortcuts

The whole list, and how to remap it.

Tabs and workspaces

What the sessions palette navigates.

The themes

What the Theme group changes.

Interface tour

Where the palette fits.