Even when I set the default default file type to be .txt, if I enable the "Recognize .txt as markdown" setting, new files are created as .md files instead of .txt
New files extension should be configured in Preferences -> General -> Default file extension.
Thanks I have that preference set to .txt but new files are still created as .md. I'm only able to get it to create new files as .txt if I disable the "Recognize .txt as markdown" setting.

I have the same issue too.
Fixed in 3.0
Most helpful comment
Thanks I have that preference set to .txt but new files are still created as .md. I'm only able to get it to create new files as .txt if I disable the "Recognize .txt as markdown" setting.
