Thanks for the positive feedback, and the issue report.

The logs attached seem identical (both fail to compile).

Could you also enable vMicro > Compiler > Show Build Properties, and attach both logs again?

Thanks for the logs.

The failing build is using the v5.3 of the esp32-arduino-libs (from v3.1.1 of the ESP32 Board Package), whereas the successful build is using v5.1 (which is packaged with the v3.0.7 board package you are currently using).

Can you try closing Visual Studio, deleting the below folder, and then open and build the failing project again?
arduino-portable/packages/esp32/tools/esp32-arduino-libs/idf-release_v5.3-cfea4f...

That should remove the conflicting tools, and we will investigate to find why the incorrect tool version is selected in this scenario.

Just to update on the root cause of this, in brief it is that the arduino-portable\package_index.json file was not at the latest version, so when attempting to determine the correct tool to use for v3.0.7 it could not be found in the file, so the highest version was used (as per the Arduino Specification).

We have updated the internal file (used as a starting point for the portable setup) to resolve this.

If you suspect this is happening again in the future, you can open the Micro Explorer > Board Manager, and click "Check for Updates" which will pull the latest file from the web.