Java Runtime incorrect, when using gradle toolchains

I am using the following build.gradle file:

plugins {
    // Apply the java-library plugin for API and implementation separation.
    id 'java-library'
}

java {
    toolchain {
        languageVersion = JavaLanguageVersion.of(17)
    }
}

repositories {
    // Use Maven Central for resolving dependencies.
    mavenCentral()
}

dependencies {
    // Use JUnit test framework.
    testImplementation 'junit:junit:4.13'

    // This dependency is exported to consumers, that is to say found on their compile classpath.
    api 'org.apache.commons:commons-math3:3.6.1'

    // This dependency is used internally, and not exposed to consumers on their own compile classpath.
    implementation 'com.google.guava:guava:29.0-jre'

    // Java Parser and Code Generator
    implementation 'com.github.javaparser:javaparser-symbol-solver-core:3.24.7'
}

It uses the Java 1.17 toolchain, however in the Configure Java Runtime Tab, it shows Java Version 12:

When I try to use newer Java features, it shows the following Error:
The Java feature 'Text Blocks' is only available with source level 15 and above

Environment

• Operating System: Windows 10
• JDK version: 1.17
• Visual Studio Code version:
• Java extension version: 1.12.0
• Gradle version: 7.0.0

Steps To Reproduce

Sample Project: java-rewriter.zip

1. open lib/src/test/java/dev/levno/javarewriter/LibraryTest.java in vscode
2. Error is shown

Current Result

Error is displayed in File

Expected Result

No Error should be displayed

Beginnen Sie mit der Datei build.gradle des Beispielprojekts und lib/src/test/java/dev/levno/javarewriter/LibraryTest.java, reproduzieren Sie anschließend die Diagnose in VS Code und überprüfen Sie den Tab Configure Java Runtime. Die Aufgabe ist erledigt, wenn das Projekt mit der Java 17 Gradle-Toolchain den Fehler auf Quelltextebene bezüglich Textblöcken nicht mehr meldet.