Launch Development Server produces the error - "Open up a new workspace containing only the site you are working on"

[canxerian]

Describe the bug
The "Launch Development Server" feature doesn't appear to be working as expected. Project is created using gatsby-cli version: 4.19.0

To Reproduce

1. Create a new Gatsby project using the gatsby-cli
2. Open in VS Code and use this plugin to launch the development server via the status bar button

Expected behavior
gatsby develop is called and accessible at http://localhost:8000/

Screenshots

Desktop (please complete the following information):

• OS:
• Windows 11