Hi there,

It seems like by default, the azure functions extension completely ignores the selected python path, and instead just uses python in the default path. I troubleshot this issue for days and learned way more about debugging than I ever wanted to to get it working.

Basically, the workaround is as follows:
My tasks.json

{
	"version": "2.0.0",
	"tasks": [
		{
			"type": "shell",
			"label": "func: host start",
			"command": "conda activate AzureFunctions ; func host start --language-worker -- '-m ptvsd --host 127.0.0.1 --port 9091'",
			"problemMatcher": "$func-python-watch",
			"isBackground": true
		}
	]
}

I understand that you may not want to support conda out of the box, but it would be nice if it would respect the Selected Interpreter when testing.

After finding a solution I looked for similar issues and this issue and solution have been closed multiple times:
#2750
#3263
#3332 - Sort of?

Repro Steps

1. Install Anaconda
2. Create virtual environment using the following command in an anaconda prompt: conda create -n AzureFunctions python=3.9.7
3. Activate Environment: conda activate AzureFunctions
4. Install debugger: conda install ptsvd
5. Install Azure-functions: pip install azure-functions
6. Navigate to ~/Anaconda3/envs
7. Set python.pythonPath=%userprofile%\Anaconda3\envs\AzureFunctions
8. Create function project.
9. Hit F5