auto-readonly-mode

Automatically enable read-only mode when the current file is located outside the workspace.

Help

This extension is useful when you wish to avoid modifying any files that beyond the current workspace. For files within the current workspace, use this configuration: "files.readonlyInclude": {}.

How to disable auto-readonly-mode for some files?

Edit settings.json:

"files.readonlyExclude": {
    "**/settings.json": true // the files you want to exclude
}

How to disable readonly mode on this file?

Press command-shift-p or ctrl-shift-p and run this command: File: Reset Active Editor Read-only in Session (workbench.action.files.resetActiveEditorReadonlyInSession)