Would 3 years of master's in Computer Science look bad in PhD applications? Basically I'm in an MS program in Computer Science where I do either 8 courses or 6 courses (2 courses per semester) + thesis (spread across 2 semesters).

My original plan was to complete the thesis and graduate in 2.5 years. (The 6 months extra is because of a 6 month co-op/internship).

Now due to COVID-19, I couldn't effectively found a thesis advisor on time so I have extended my internship to 6 more months.

Would it hurt my PhD applications if I have taken 3 years to finish a master's degree (2 years 8 months actually) as opposed to the standard 2 year duration ? Given I would be graduating with 1 year of internship experience. Would it be better to skip thesis and just do coursework master's and graduate in 2.5 years ?

Thanks !
I think in the current circumstances, taking a few months extra to finish your Master's will not be looked on negatively. It will be easy to explain in your applications (exactly as you have done here) the reason for the extra time taken. Overall, a thesis-based Master's will probably be better for PhD applications than a coursework-based one, as you will have more demonstrable research experience.