After you update the extension to version 1.2.2 and enable the debug option
there should be 2 Intelephense sources in the list of extension sources there.
I think you copied the one from "Intelephense Language Server", could you send
me the output from the one called "Intelephense"?

If it’s not there you need to update the extension, enable the debug setting in
the extension preferences, and restart Intelephense.

-Kristófer R.