Yes, that's expected behavior. The vscode-objectscript extension defines the languages based on file extensions:

      {
        "id": "objectscript",
        "aliases": [
          "ObjectScript"
        ],
        "extensions": [
          ".mac",
          ".int"
        ]
      },
      {
        "id": "objectscript-class",
        "aliases": [
          "ObjectScript Class"
        ],
        "extensions": [
          ".cls"
        ]
      },
      {
        "id": "objectscript-macros",
        "aliases": [
          "ObjectScript Include"
        ],
        "extensions": [
          ".inc"
        ]
      },
      {
        "id": "objectscript-csp",
        "aliases": [
          "ObjectScript CSP"
        ],
        "extensions": [
          ".csp",
          ".csr"
        ]
      },

@Dominic Chui Please try issue #2 again using LS version 1.1.6 and vscode-objectscript version 1.0.11. To diagnose issue #1, I'll need the text of the routine that you're seeing the "class does not exist" error in. Please submit an issue at https://github.com/intersystems/language-server/issues with a code sample.