[Task]: Structure Local and Dev Container Workspaces

[simonkurtz-MSFT]

Describe the task

Create separate workspaces for local and dev container. Use a base workspace, if inheritance is possible.

What we have now is workable, but it can be refined and improved upon. This will result in a cleaner, more understandable, hierarchical, and more maintainable setup. It should also cut down on unnecessary file changes when settings cannot apply to both local and dev container configurations.

Use this as the starting point.

Testing both setups extensively is very important for this task!

[simonkurtz-MSFT]

There is no inheritance for the workspaces (been years in the making to support this), so this is a bit moot.