The issue here was that I was ignoring the authority when registering the file formatter.
On remote share paths the authority is the first part of the path which should be displayed.
For local files the authority is empty so this case should also be covered.
uri.fsPath was always doing this here
fyi @bpasero

@isidorn , not sure this is fixed yet. Using:

Version: 1.28.0-insider (user setup)
Commit: 2558a72d6902015b142ef45c57b664ce1f09e03f
Date: 2018-09-21T05:19:52.215Z
Electron: 2.0.9
Chrome: 61.0.3163.100
Node.js: 8.9.3
V8: 6.1.534.41
Architecture: x64

I now see the server name when the path to files are shown, but if I copy the path, the path reads without the leading \\ so its still not a complete path. Also, maybe because of this, the 'compare with saved' still doesn't work for files on UNC paths.

the error message I get, when comparing with saved actually still fails to show the server name, so this may be a different but maybe related issue:

Unable to open 'TheBigTestFile.ps1 (on disk) ↔ TheBigTestFile.ps1': File not found (file:///User Documents/Carl/PowerShell Scripting/VS Code Language Syntax/sample scripts/TheBigTestFile.ps1).

User Documents is the share name, the server name is completely gone.

@sbatten can you please verify if this is fixed
@msftrncs compare with is an unrelated bugs, please file new issue. Copy path should I will look into fixing

@isidorn it now shows the full path but in the form "mysmb\folder\file.txt" which is strange because you can't copy and cd to that path. I would expect the path to maintain the leading\\

This doesn't seem to be fixed, only slightly less broken. I just tried with the Insider build and I get server\share\file.ext -- which is not a valid UNC path -- instead of \\server\share\file.ext. Should this be issue be re-opened?

@ThubLives the latest fix is not yet available in insiders. Should be in the next build.

Got the latest insiders, path now shows server with \\, copy path includes it as well. 'compare with saved' was not affected by this fix.

@msftrncs thanks for trying it out, adding verified label