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The presence of a tsconfig.json file in a directory indicates that the directory is the root of a TypeScript project.
Because of this I don't think vscode should attempt to go further down the folder structure, this is how it works for .eslintrc and other similar config files too.
It sure would be desirable to have this feature, seeing that @angular/cli is using the 'tsconfig.json inside src/ folder' scheme. And with the recent 1.0.0 release candidates, there are even multiple tsconfig*.json files under src/ for different build variants. It only seems to be keeping a root tsconfig.json around to satisfy tools such as Visual Studio Code that do not respect tsconfig.json files in subdirectories.
For example, if there was a /tsconfig.json, a /src/tsconfig.json and a /src/app/app.ts, I'd expect vscode to use the /src/tsconfig.json file when autocompleting and building /src/app/app.ts.
@httpdigest We do pick up tsconfig.json files in subdirectories and treat those subdirectories as individual projects. If you are not seeing the correct behavior around this, please open a new issue and I can take a look
Steps to Reproduce:
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