P.S. I left a solution regarding syntax highlighting on this issue for all vscode and pug user.

Add your User settings (Command Palette -> Preferences: Open User Settings -> edit settings.json) such as:

"files.associations": {
  "*.pug": "jade"
}

@gregvanl can you update the doc accordingly.
@aeschli I suggest we support both the .pug and .jade file associations.

Definitely keep supporting the now-legacy .jade associations, there is a lot of code floating around still including the old jade, in fact depending on generator versions people use (thinking about express-generator here, possibly others as well), there might actually be new projects coming up using the old jade for quite some time.

• added the '.pug' file association
• once the new name is established and e.g. the pug-lang.com website is up and ready, we can also rename the extension, the label and the language id.

Um, so what about do the same here?
https://github.com/Microsoft/vscode/blob/2f76c44632b0d47ba97f66fbc158c763628e30b3/extensions/jade/syntaxes/Jade.json#L5
Change it to "name": "Pug" or something

Also renamed extension and label. Kept languageID for backward compatibility. See #18219