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Path Traversal occurrences in Theia
In Eclipse Theia 0.1.1 to 0.2.0, it is possible to exploit the default build to obtain remote code execution (and XXE) via the theia-xml-extension. This extension uses lsp4xml (recently renamed to LemMinX) in order to provide language support for XML. This is installed by default. (2021-09-02, CVE-2021-34436)
Why Path Traversal can be dangerous
Relative Path Confusion means that your web server is configured to serve responses to ambiguous URLs. This configuration can possibly cause confusion about the correct relative path for the URL. It is also an issue of resources, such as images, styles etc., which are specified in the response using relative path, not the absolute URL.
If the web browser permits to parse "cross-content" response, the attacker may be able to fool the web browser into interpreting HTML into other content types, which can then lead to a cross site scripting attack (link do XSS).