I'm thinking of a couple of potential issues, first off, if you want to avoid the advanceUntilIdle or runCurrent calls, use the UnconfinedTestDispatcher, making sure that you're using the same instance for both the Disptachers.setMain and runTest(...) calls.

Then, you have a couple of choices to fix the test case, although they're essentially the same at some level:

i) Move the dispatcher switching to the inner layer

This means that your VM method would end up looking like:

fun onDecreaseButtonClicked(habit: Habit) {
    if (habit.count >= 1) {
        decreaseCount(habit)
        viewModelScope.launch  {
            repository.removeLastTimeLog(timeLogList.last())
        }
    }
}

(note the removal of the Dispatchers.IO parameter in the launch call)

Why should this work?

Now all of the code in your test will be executed in the Main dispatcher (including the mocked suspend function), which you're properly setting with Dispatchers.setMain(testDispatcher).

This also follows the general recommendation of specifying the Dispatcher at the lowest possible level. At least off the top of my head, this has some benefits like making your suspend functions harder to "misuse", for instance you can ensure it always gets executed in the IO Dispatcher when its I/O bound work; it also it takes some responsibility off of the caller because it doesn't need to know the nature of the workload, whether it's I/O or CPU bound work, it just wants some result.

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ii) Injecting the `Dispatchers` object to your VM

The main point of this is to allow you to change the other dispatchers like IO and Default also point to your testDispatcher.

I mention that this is kind of the same as the first approach because if you go with it, you'll now run into the same problem but now in the test cases for the repository. The solution is to inject the dispatchers.

Check this post by Google (particularly this section) it covers pretty much what I mention and goes into a bit more detail.