Sniffer turns a running Minecraft game into a debugger for your .mcfunction datapacks.
This extension is the VS Code side of it: it attaches to a game running the Sniffer mod over the Debug Adapter Protocol, so breakpoints, stepping and variable inspection work in .mcfunction files the way they do in any other language.
Load your world, run Connect to Minecraft from the Run and Debug view, and accept the authorization dialog that pops up in game.
Set a breakpoint in a .mcfunction file, call that function with /function, and the execution halts before the marked command.
address must match the port and path configured in the mod, 25599 and /dap by default.
On a multiplayer server, add "user" with your Minecraft username: that player is the one prompted to accept the session, and must be an operator.
Documentation
The VS Code guide covers the launch configuration, the debug toolbar, the variables and the supported breakpoint kinds.
The commands reference covers what the mod adds in game.