IntelliSense for Search Paths doesn't work when import folder outside the workspace.

[linette-zyy]

Environment

Steps to Reproduce

1. Open a folder as workspace in SE.
2. Add new python file in SE named WholsRunningMe.py.
3. Select a python environment from the python toolbar to open PythonSettings.json and you can check “Show All Files” on the toolbar to reveal local settings.
4. Create a folder named folder1 in your local, such like : C:\Users\vyizh12\source\repos\python-azure-web-app-cookiecutter\folder1
5. Add init.py in folder1 and type some code in __init__.py
def FOLDER1_MSG(): print("hello world!")
6. Add searchpaths in PythonSettings.json.
   
7. Type code below in WholsRunningMe.py

import folder1
folder1.FOLDER1_MSG()

8. Make sure IntelliSense should show squiggles on the import statement

Expected behavior
Make sure IntelliSense should show when import statement

Additional context and screenshots
No IntelliSense when import folder1

[StellaHuang95]

This also repros with project view scenarios. Adding the path to Tools -> Options -> Python -> Analysis -> Search Paths doesn't resolve the imports. Pylance logs show Info: Un-registering request handler for 3dad9764-9666-4d1e-b1c2-35f267fcf494 failed., might be an indication of what goes wrong.

I can also repro this with last pylance stable(2023.12.1), which indicates this bug is not a regression and has been there for a while.

[StellaHuang95]

@linette-zyy How did you find PythonSettings.json in folder view? I don't see it.

[linette-zyy]

@StellaHuang95

[linette-zyy]

This issue also repro on “Add folder to SearchPath” on today's build

No IntelliSense after add folder to SearchPath