Tests not being discovered/shown in the Testing UI

I followed the steps in the README and can successfully run the CLI from the command line. The --coverage option works as expected on the command line but I don't see anything on vscode even after running the tests directly from the editor. Does this require any setup? Is there a sample repo I can use?

This is the launch configuration I am using:

        {
            "name": "Extension Tests",
            "type": "extensionHost",
            "request": "launch",
            "runtimeExecutable": "${execPath}",
            "testConfiguration": "${workspaceFolder}/.vscode-test.mjs",
            "args": [
                "--disable-extensions",
                "--extensionDevelopmentPath=${workspaceFolder}",
                "--extensionTestsPath=${workspaceFolder}/out/test"
            ],
            "outFiles": ["${workspaceFolder}/out/**/*.js"],
            "preLaunchTask": "npm: watch"
        }

This is what I get when I use the Test: Run All Tests command:

 *  The test run did not record any output. 

Start with the README instructions, the .vscode-test.mjs configuration, and the extension test launch settings shown in the issue. Run Test: Run All Tests and compare the command-line coverage behavior with the VS Code Testing UI; done means tests are discovered and shown there instead of producing no recorded output.