It seems like VS Community with python tools has a better syntax highlighting than VS Code with \"Python\" by Don Jayamanne. As you can see in the picture attached, VS Community
I ran into the same issue and some VS Code themes are not supporting syntax highlighting atleast for me. I tried with Ruby and Python and the theme I was using was Dark(Visual Studio).
Changing to Dark+ (Default Dark) did the trick for me.
Goto Preferences -> Color Themes and choose Dark+(Default Dark) or something similar.
Hope it helps.