I would like to have a shared terminal in VScode when working on a group project, but I don't want people peeking through my files on my computer. Is this possible to do right now with the LiveShare extension?
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You can share a terminal read-only, so only you as the host can run commands, but guest collaborators may just see the output of commands you run:
After starting a collaboration session, click Share terminal... > Read-only
.
Alternatively, you can bring up the Command Palette..., (partially) enter >Live Share: Share Terminal
and select Read-only
.
Keep in mind that in VS Code, already opened terminals are automatically shared read-only by default when starting to Share. However, you can disable this in the Settings:
"liveshare.autoShareTerminals": false
Note:
If the collaboration session is in read-only mode, only read-only terminals can be shared by the host.
See also the Visual Studio Live Share Docs:

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Cheers, would be nice if there was a read/write mode but only for the project folder – user21398 Feb 18 '21 at 20:02