I created simple node.js application (source code from here https://azure.microsoft.com/en-us/blog/visual-studio-code-and-azure-app-service-a-perfect-fit/)
I wasted a few hours today trying to figure this problem out. What worked for me was deleting the existing launch.json and running the application, which prompts you to select an enviroment, which in my case was Node. This created a new launch.json in which I updated the program path.