I have not been able to reproduce the issue. Do you have any more clues? For example,
- Is the daml.yaml file in the folder that VS Code is open to?
- Do you have multiple daml.yaml files in your folder and subfolders?
- If the daml.yaml is in a subfolder, do the Daml features start working if you open VS Code to the folder with the daml.yaml?
- Would you be willing to post your daml.yaml?