Not being able to use breakpoints when coverage is running is a known issue. It
is possible to disable coverage during test debugging in VS Code by specifying
a customized launch configuration that sets PYTEST_ADDOPTS to --no-cov.
However, this customized configuration only reads launch.json. This
repository demonstrates this "bug", which is actually documented in the VS Code
docs.
Project A demonstrates that pytest configured with the --no-cov option in
pyproject.toml can stop at breakpoints as expected. However, even though the
correct configuration settings are set in workspace.code-workspace Project B
shows that the same breakpoint that works in Project A does not stop execution
during test debugging. This indicates that indeed VS Code Python only examines
the launch.json file for a customized test debug launch configuration.
In the future, it would be beneficial if VS Code Python can parse customized
test debugging configurations from settings.json as well as from multi root
workspaces.