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VSCode is adopting a new YAML grammar
microsoft/vscode#224978
Injecting into nested block maps doesn't work fully anymore
this is because the new grammar captures the prefixing whitespace, disallowing this injection to capture the newline
^
Workaround is to change
^
to(^|\\G)
extended-embedded-languages/utilities/syntax_templates/yaml_syntax.js
Line 29 in c128e89
Install VSCode 1.92.0, the insiders build or the new grammar
Make sure no other YAML extension is installed (Red Hat's etc)