Quarto installed via conda can't see jupyterlab and does not work with the vscode extension

It seems like quarto installed via conda does not recognize jupyter/jupyterlab installation in the same environment. See screenshot:

I have seen that I can set the QUARTO_PYTHON env variable but I would like quarto to automatically use the python version in the conda env where quarto is installed (ie read path instead of setting its own python version)

It also seems like VScode cannot detect this version of quarto although I have specified the full path in the settings:

When I try to render, it says "quarto not found".

I can work around this issue by launching vscode from a terminal where the conda env has already been activated but that seems to be defeating the purpose of having the setting to set the explicit quarto path

Reproduce the issue with Quarto installed in a conda environment, with Jupyter or JupyterLab present, then render through the VS Code extension using its explicit Quarto path. Compare behavior with VS Code launched from an activated environment. Done means Quarto finds the environment's Python and the extension detects and renders with the configured installation.