yml formatting error cause invalid yml file

Describe the bug

Formatting of this yaml file doesn't yield valid yaml; comment confusion

! Please note: I don't know that my input is strictly yaml syntax, but Python yaml does read it correctly.

import yaml
with open("yml_format_bug.yml") as fp:
    yaml.safe_load(fp)

input yaml

first: 123

v1: {
    file: PYTHON_TO_RUN_REMOTELY, 
    type:   env # A type of 'env' pulls the value from an environment variable.
            # Only works for file: and path: values., absolute: true
}

v2:
    file: PYTHON_TO_RUN_REMOTELY
    type:   env # A type of 'env' pulls the value from an environment variable.
            # Only works for file: and path: values., absolute: true

last: 123

Expected Behavior

I don't know what the correct format should be, but it should give valid yaml in any case. Here is an example of what it might look like. I don't particularly care the format

first: 123

v1: { file: PYTHON_TO_RUN_REMOTELY, type: env # A type of 'env' pulls the value from an environment variable.
      # Only works for file: and path: values., absolute: true 
}

v2:
  file: PYTHON_TO_RUN_REMOTELY
  type:
    env # A type of 'env' pulls the value from an environment variable.
    # Only works for file: and path: values., absolute: true

last: 123

Current Behavior

Closing curly gets put into comment causing yaml to be invalid.

first: 123

v1: { file: PYTHON_TO_RUN_REMOTELY, type:
      env # A type of 'env' pulls the value from an environment variable.
      # Only works for file: and path: values., absolute: true }

v2:
  file: PYTHON_TO_RUN_REMOTELY
  type:
    env # A type of 'env' pulls the value from an environment variable.
    # Only works for file: and path: values., absolute: true

last: 123

Steps to Reproduce

Create new file containing my "Input yaml" above.
Change file type to yaml if necessary.
Press Ctrl + Shift + I in vscode with extension installed and enabled.

Environment

[X] Linux