@Marcel den Ouden
The VS Code extension uses your objectscript.export settings to determine what the name of the file should be from its URI. It assumes that if you're working in a client-side folder you will have those settings properly configured for how your classes are stored in the local folder (since they are needed to export classes). I don't know how the full path could be used for the file name so that is probably a bug.
@Hannah Sullivan
This is documented in the Server Manager's README. It will be added to the official InterSystems documentation for VS Code at a later date.
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@Pravin Barton
If you want to only search a single folder, you can right-click on it in the explorer and select "Find in Folder...". VS Code will show the search view and auto-populate the "files to include" text box.