I don't understand why VSCode itself doesn't already have this, since it is silly to have to install 100 extensions to add this behavior to every different possible place that a string literal with an interior language could appear

I also suspect that unlike the JetBrains feature that does this (Language Injection), VSCode doesn't understand the code it just syntax highlights it. Meaning if we take the cited example and change it to the following, would VSCode turn it red?

  example3: | # js
    console.ogl('wat")