The extension doesn't seem to work when .NET 5 is installed side-by-side

[hajekj]

On my computer, I have following .NET Core SDKs installed:

C:\Users\hajek>dotnet --list-sdks
2.1.800-preview-009696 [C:\Program Files\dotnet\sdk]
2.1.800 [C:\Program Files\dotnet\sdk]
2.2.400-preview-010219 [C:\Program Files\dotnet\sdk]
2.2.400 [C:\Program Files\dotnet\sdk]
3.0.100 [C:\Program Files\dotnet\sdk]
3.1.300-preview-015135 [C:\Program Files\dotnet\sdk]
5.0.100-preview.2.20176.6 [C:\Program Files\dotnet\sdk]

When trying to create a Function project from VS Code, I end up with following error:

You must have the .NET Core SDK installed to perform this operation. See here for supported versions.

I tried uninstalling .NET SDK v5 and it seems to work. So I thought that creating global.json in the root disk folder (eg. C:) but not when I do it in the project folder.

{
    "sdk": {
        "version": "3.1.400-preview-015151",
        "rollForward": "disable"
    }
}

I believe this may be related to #1986