Visual Studio Code with sftp

I am trying to integrate the Visual Studio Code SFTP plugin - https://github.com/Natizyskunk/vscode-sftp - with 1Password to connect to my host (Hetzner.de) using sftp (port 22).

I have set up the sftp details for this host like so

{
"name": "My server",
"host": "hostname",
"protocol": "sftp",
"port": 22,
"username": "{{1password:username}}",
"password": "{{1password:password}}",
"remotePath": "/",
"uploadOnSave": true,
"useTempFile": false,
"openSsh": false
}

but when I try to authenticate, 1Password is never queried, ultimately failing. I have 1Password CLI installed and I can interact with it (Mac OS). Has anyone successfully manager to achieve this integration?