This might be a issue where your Vetur extension is not correctly installed. You can run the command Developer: Reinstall Extensions. If this does not solve your problem feel free to reopen the issue.
I got the same problem on mac.
Delete the whole extensions folder solved the problem.
Windows %USERPROFILE%.vscode\extensions
Mac ~/.vscode/extensions
Linux ~/.vscode/extensions
Most helpful comment
I got the same problem on mac.
Delete the whole extensions folder solved the problem.
Windows %USERPROFILE%.vscode\extensions
Mac ~/.vscode/extensions
Linux ~/.vscode/extensions