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Apologies if this is already in here somewhere, I looked through the open and closed issues and didn't see it. When I view a PowerShell script or module in VS Code, I can see that the #region and #endregion tags show up in green like proper comments, but don't provide a way to collapse the relevant lines like the PowerShell ISE provides. It was suggested in the PowerShell FB group to get this on the list for the PowerShell extension to VS Code, and I'll let the folks there know about it in case further discussion is needed.
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