%matplotlib widget in a preview notebook editor.The cell output reads:
No renderer could be found for MIME type: application/vnd.jupyter.widget-view+json
[<matplotlib.lines.Line2D at 0x20142fd7e20>]
Minimal example:

For a matplotlib widget to be drawn, as per the current notebook editor:

@ruilvo thanks for reporting this and sorry about the issue. Currently I believe that widget support is still coming online for the new notebook editor, but I'm seeing an issue with display in the old notebook display as well.
@IanMatthewHuff Thanks for the reply. The preview notebook editor looks great. I like that it's slowly opening up to have the cells feel like small regular text editors, with all the cool functionality we use on the regular files. Not sure what you mean about the old notebook display... It was always looked like that for me, care to explain what you mean?
@ruilvo Not sure if it's just a setup issue. But on my machine I'm not actually seeing the matplotlib widget on the non-preview editor, though it is working for you. That's all I meant by the old notebook display. Figured that when we investigate this bug for the new notebook editor we should make sure that we check the old editor as well.
@IanMatthewHuff Make sure you're running the magic %matplotlib widget and not for example %matplotlib notebook. And when you do, VSCode should prompt you to install the additional third-party JS to make it work. If I recall correctly it once didn't work on the notebook, but running the magic on an IPython interactive window caused the prompt to display.
Thanks for your feedback. This issue will be addressed once VS Code adds native support for editing notebooks. Please see https://github.com/microsoft/vscode/issues/91987. This work is in progress, so some widget behavior is still not working well.