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Thanks for the reproduce method. I really appreciate your method to do this. I am also facing such problem but thanks to the EssenceCartoon Animation Studio who resolved my problem in no time.

essencecartoon.com

Experienced the issue in 2020.3.14 with Visual Studio 2019 and 2022
Issue no longer observed in 2021.3.10

please check this issue.
https://stackoverflow.com/questions/66019773/how-to-add-gradient-color-to-text-element-in-wix-site/66019799#66019799

Thanks for sharing this useful information - http://issuetracker.unity3d.com/issues/referenceoutputassembly-key-is-set-to-false-in-project-references

In Package Manager, find "Visual Studio Code Editor" and upgrade to version 1.2.3 to fix the issue

I have received an update from Unity that this issue has been resolved in `com.unity.ide.vscode@1.2.3`. You can see the changes to the code mirrored here: https://github.com/needle-mirror/com.unity.ide.vscode/commit/efa6bd0ed1ed0129f6f5c47c81f1d4b2bbd9ac53.

So update the package `com.unity.ide.vscode` to version 1.2.3 and everything should be working again.

Got this error on 2019.4.12f1.

Thank you @peabnuts123 for the workaround. I am new to issue tracker and not sure where to file this issue.

UPDATE: It turns out com.unity.ide.vscode@1.1.4 is utterly broke as well, see Unity forum thread: https://forum.unity.com/threads/visual-studio-code-editor-1-1-4-error-the-referenced-project-does-not-exist.806628/

1.2.0 was a release to address this issue. It seems the recommendation at the moment is to actually roll back to 1.1.3. This is (finally) working correctly for my on my machine.