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.

A regression has been made in the package com.unity.ide.vscode since v1.2.0 that re-introduces this property in generated csproj files, breaking external compilers.

You can see it in the code mirrored here: https://github.com/needle-mirror/com.unity.ide.vscode/blob/168d16ca32f5864f8b9332b440c538b8171850bc/Editor/ProjectGeneration/ProjectGeneration.cs#L479

If you revert back to com.unity.ide.vscode@1.1.4 then this problem goes away (though you lose the "Regenerate project files" button in settings - automatic generation still works). I've raised a ticket with Unity to remove this from the package, will comment here again when it is updated.

uuumm are you sure this is resolved? I'm getting the same behaviour on versions:
2020.1.6
2020.1.9
2020.2.0b7

https://issuetracker.unity3d.com/issues/mouse-cursor-over-unity-5-dot-4-window-disappears-on-ms-surface-book

nice