Cause of Warning: PowerShell detected that you might be using a screen reader and has disabled PSReadLine for compatibility purposes

Solution 1:

Set the following registry key:

Windows Registry 
Computer\HKEY_CURRENT_USER\Control Panel\Accessibility\Blind Access\On

to value 0 and reboot.

I discovered this alternative solution via the issue mentioned by @Znatz.

Source

Solution 2:

There is a fix for this error.

Powershell issue #11751

Create a .ps1 file, paste the following code and run it with powershell.

Add-Type -TypeDefinition '
using System;
using System.ComponentModel;
using System.Runtime.InteropServices;

public static class ScreenReaderFixUtil
{
    public static bool IsScreenReaderActive()
    {
        var ptr = IntPtr.Zero;
        try
        {
            ptr = Marshal.AllocHGlobal(sizeof(int));
            int hr = Interop.SystemParametersInfo(
                Interop.SPI_GETSCREENREADER,
                sizeof(int),
                ptr,
                0);

            if (hr == 0)
            {
                throw new Win32Exception(Marshal.GetLastWin32Error());
            }

            return Marshal.ReadInt32(ptr) != 0;
        }
        finally
        {
            if (ptr != IntPtr.Zero)
            {
                Marshal.FreeHGlobal(ptr);
            }
        }
    }

    public static void SetScreenReaderActiveStatus(bool isActive)
    {
        int hr = Interop.SystemParametersInfo(
            Interop.SPI_SETSCREENREADER,
            isActive ? 1u : 0u,
            IntPtr.Zero,
            Interop.SPIF_SENDCHANGE);

        if (hr == 0)
        {
            throw new Win32Exception(Marshal.GetLastWin32Error());
        }
    }

    private static class Interop
    {
        public const int SPIF_SENDCHANGE = 0x0002;

        public const int SPI_GETSCREENREADER = 0x0046;

        public const int SPI_SETSCREENREADER = 0x0047;

        [DllImport("user32", SetLastError = true, CharSet = CharSet.Unicode)]
        public static extern int SystemParametersInfo(
            uint uiAction,
            uint uiParam,
            IntPtr pvParam,
            uint fWinIni);
    }
}'

if ([ScreenReaderFixUtil]::IsScreenReaderActive()) {
    [ScreenReaderFixUtil]::SetScreenReaderActiveStatus($false)
}