Unable to find project root. Expecting to find one of host.json, local.settings.json in project root.

I'm using VSC extension for creating functions. When I execute run.ps1 it creates a new terminal loading my user profile and executing the script. Then I receive the error from the subject.
My userprofile has the command:
"New-PSDrive -Name DRS -PSProvider FileSystem -Root "C:\DRSCoding"
Not sure if that could be causing the issue.

Start by reproducing the failure from the VS Code extension when run.ps1 opens a terminal with the user profile enabled. Inspect how project-root discovery uses host.json and local.settings.json, including behavior on the DRS PowerShell drive. Done means the command identifies the intended project root and runs successfully in this setup.

Written by the indexing model from the issue text.