The VS Code extension needs to be a `workspace` extension, because it relies on access to the workspace. The rust-analyzer binary needs to run on the same machine as the checkout of the code it's working on. https://code.visualstudio.com/api/advanced-topics/remote-extensions#architecture-and-extension-kinds https://code.visualstudio.com/api/advanced-topics/extension-host#preferred-extension-location If an extension doesn't set extensionKind, VS Code will try to deduce the kind based on the presence of various fields in the package.json, such as a `main`. https://github.com/microsoft/vscode/blob/fc23f2d26631c6a2c4bf9f69506ea74c90a32804/src/vs/workbench/services/extensions/common/extensionManifestPropertiesService.ts#L222 Instead, mark the extension kind as explicitly `workspace`. This is more explicit and prevents future changes to package.json accidentally making it run in the wrong environment. It's also helpful when debugging startup bugs.