sshConfigPath doesn't seem to be honored for hosts definitions

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Using VSCode on MacOS. I am setting the correct path for sshConfigPath (which is the default ~/.ssh/config) but it doesn't seem to be honored. It complains that the hostname could not be resolved, despite it being defined in ~/.ssh/config and despite the ssh command working fine.

Running ssh devhost in a terminal will connect me directly just fine, with the contents in ~/.ssh/config mentioned below, but this sftp extension fails saying host could not be resolved.

Does this sftp extension actually parse the contents in ~/.ssh/config for host definitions? If not, what is the sshConfigPath actually used for?

Host dev devhost devhost.example.com
	HostName devhost.example.com
	Port 22222

Host *
	# no passphrase privkey
	IdentityFile ~/.ssh/nopass_id_rsa.key
	#Compression yes
	User root
	ServerAliveInterval 5
	ServerAliveCountMax 1
	TCPKeepAlive yes