Unable to use the debug functionality when used as a web extension

Using this example as a web extension doesn't appear to work - at least when tested as per the VS Code docs. It appears from recent commits (e.g. https://github.com/microsoft/vscode-mock-debug/commit/354c0e93c966a498360c660805d7f2b18d76b2a5) this should be supported.

I've cloned this repo and built, and I'm trying to test as outlined at https://code.visualstudio.com/api/extension-guides/web-extensions#test-your-web-extension .

When I try I on vscode.dev (or github using the "open in github.dev" option) and load the locally built extension as outlined using npx serve and npx localtunnel I see CORS errors in the console as shown below, and the extension is not available.

Refused to connect to 'https://eager-otters-kick-67-183-2-129.loca.lt/package.json' because it violates the following Content Security Policy directive: "connect-src 'self'
            wss://vsls-prod-ins-usw2-private-relay.servicebus.windows.net
            wss://vsls-prod-rel-usw2-relay-1.servicebus.windows.net
            wss://vsls-prod-rel-usw2-relay-2.servicebus.windows.net

When I try as outlined in the docs using @vscode/test-web (e.g. running the command vscode-test-web --extensionDevelopmentPath=. . from the package.json) then I can see the extension is loaded and I can set a breakpoint in the .md file in the workspace, but on trying to debug via the command "Mock Debug: Debug File" then the debugger appears to launch but just sits there, and in the console output I see the below error (truncated):

Uncaught (in promise) Error (FileSystemError): Unable to read file '/vscode-test-web://mount/README.md' (Unavailable (FileSystemError): Error: No file system handle registered (/vscode-test-web:/))
	at Yt._handleError (../../../vs/workbench/api/worker/extensionHostWorker.js:76:30420)
	at Object.readFile (../../../vs/workbench/api/worker/extensionHostWorker.js:76:28894)
	at async Object.readFile (http://localhost:3000/static/devextensions/dist/web-extension.js#vscode-extension:4303:12)
	at async MockRuntime.loadSource (http://localhost:3000/static/devextensions/dist/web-extension.js#vscode-extension:3335:31)
	at async MockRuntime.verifyBreakpoints (http://localhost:3000/static/devextensions/dist/web-extension.js#vscode-extension:3462:7)
	at async MockRuntime.setBreakPoint (http://localhost:3000/static/devextensions/dist/web-extension.js#vscode-extension:3241:5)
	at async eval (http://localhost:3000/static/devextensions/dist/web-extension.js#vscode-extension:3652:38)
	at async Promise.all (index 0)
at async _MockDebugSession.setBreakPointsRequest (http://localhost:3000/static/devextensions/dist/web-extension.js#vscode-extension:3657:31)

Something I'm doing wrong? Are the docs wrong (or incomplete)? Or is there an issue here? Thanks.

Start with the package.json command for @vscode/test-web and reproduce the failure in vscode.dev or the local test web environment. Trace the web-extension.js stack around MockRuntime.loadSource and verify how README.md is accessed. Done means the web extension loads and Mock Debug: Debug File can start without the reported file-system or connection errors.