Emmet not working on new Nuxt3 OR Vite^2.6.4 project

[HenrijsS]

I've just installed Nuxt 3 which also uses Vue 3 & Composition API.
EDIT: I've also tried this on a new Vite project, Emmet still isn't working.
I have no other conflicting extensions. Vetur is disabled on a workspace level.
First things first I tried to scaffold a default template with vue snippet just to see it's missing.

Re-enabled Vetur and it's working fine.
Tried reinstalling Volar but to no avail.
The tag and attr options in the bottom toolbar are showing up and I see the Volar icon on the top-right corner, so the extension is working. I can also use it as a formatter.

I'm running Volar@v0.28.3

Screenshots:

[johnsoncodehk]

See https://github.com/nuxt/framework/discussions/845#discussioncomment-1468494