I had the same issue (at least it seemed the same), however it is possible to work around it if you are using the Python extension in conjunction with Remote Debugging.
You can ignore the extension's activation failure if that is your primary use, since VSCode is still able to debug remotely using Python Remote Attach.
After some more work on this, I found that updating the Python Extension to the pre-release version cleared up the various errors that came with the recent updates.
Answer from Zachary Barnett on Stack OverflowI had the same issue (at least it seemed the same), however it is possible to work around it if you are using the Python extension in conjunction with Remote Debugging.
You can ignore the extension's activation failure if that is your primary use, since VSCode is still able to debug remotely using Python Remote Attach.
After some more work on this, I found that updating the Python Extension to the pre-release version cleared up the various errors that came with the recent updates.
You could roll back to the historical version in the extension store to solve this problem.
If you want, you can also follow this issue on github, it's the same problem.

Please update the python extension to the latest version

or install the pre-release version directly. ( may be more useful to you )

this will basically solve your problem.
If the error continues, follow these steps:
- Uninstall Python extension (if you have pylance uninstall it first). Uninstall any other extension that is failing.
- Close all instances of VS Code.
- Go to, %USERPROFILE%/.vscode/extensions (on windows) or ~/.vscode/extensions on Linux/Mac.
- Delete any folder with the name starting with ms-python.python*
- Start VS Code, and install Python extension (also pylance if you uninstalled it in step 1).
I was having this issue and tried the above answer and it still didn't work. It turns out I hadn't installed python on my system yet. I didn't realize because I normally use it remotely.
From the VSCode documentation:
Quick start
- Step 1. Install a supported version of Python on your system (note: that the system install of Python on macOS is not supported).
- Step 2. Install the Python extension for Visual Studio Code.
- Step 3. Open or create a Python file and start coding!
Try disabling all other python extensions in VSCode. I had the same issue because a different Python VS extension was conflicting with the official extension. Here's a link that might be able to help you in more detail.
It's hard to give you a more specific answer for this type of question without knowing more about your setup.
EDIT: Look at the comment thread on this answer if you need more details
You should go through standard troubleshooting procedures like uninstalling and reinstalling ms-python.python. Check if you have multiple python extensions installed and that you only have one installed. This might give you a bit more detail.
I managed to solve my problem by reverting to a previous jupyter extension version. My initial jupyter extension was v2021.5.745244803. I reverted to v2021.5.702919634 and the problem was resolved.
To revert a jupyter extension version:
- Got to Extensions (Ctrl + Shift + X).
- Click on the extension "Jupyter" from your list of Installed extensions in the Extensions pane on the left.
- Alternatively to step 2:
3.1. Type "jupyter" in the search field above the Extensions pane on the left.
3.2. Select the extension named "Jupyter" by Microsoft (ms-toolsai.jupyter). - Click the down arrow in the "Uninstall" button underneath the number of downloads and star rating.
- Click "Install Another Version..."
Chose a previous version. I chose the version immediately before the latest, and solved the problem for me.
I hope this helps if you run into the same problem.
I fixed this problem by going to the Python extension "market" page and clicking "switch to pre-release version", then switching back to the release version pressing the same button again.
The rightmost blue button in the image below:

This reloads the extension properly and fixes any problems