VSCode's Auto Attach is not toggling for Node.js

Question

I use WSL to start VSCode with code . from my project directory in Windows Terminal. When VSCode starts up, "Auto Attach: Off" is shown in the status bar:

Clicking "Auto Attach: Off" in the status bar does not toggle it.

I then start my project in VSCode's integrated terminal with npm run debug, which corresponds to the following scripts line in package.json:

"scripts": {
  "debug": "NODE_ENV=development DEBUG='knex:*' nodemon --inspect ./server.js"
}

However, the debugger is not auto-attached, so I need to manually run the Attach configuration from the Run panel shown on the left here:

The debugger works, but I still cannot toggle the Auto Attach: Off to be On instead:

Even if I Ctrl+Shift+P --> Debug: Toggle Auto Attach, nothing happens. Even if I restart VSCode after doing so.

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So, in conclusion, how can I start my VSCode with code . from Windows Terminal and then just type npm run debug and have VSCode, run my program AND auto-attach the debugger? I also need the server to restart upon file changes, which is why I am using nodedemon in the npm run debug script.

Do I need to either:

• change launch.json configuration? Though I have tried essentially all of the boilerplate launch.json configs shown in VSCode, but none worked.

• or modify my package.json defined script for debug?

• or correct some setting on VSCode?