Thank you for the great config! If I may suggest a small adjustment for the settings.json file:
{
"Lua.runtime.version": "Lua 5.4",
"Lua.diagnostics.disable": ["undefined-global", "lowercase-global"],
"Lua.diagnostics.globals": ["playdate", "import"],
"Lua.runtime.nonstandardSymbol": ["+=", "-=", "*=", "/="],
"Lua.workspace.library": ["$PLAYDATE_SDK_PATH/CoreLibs"],
"Lua.workspace.preloadFileSize": 1000
}