Unable to open the workflow in designer using vs code

I have created a stateless workflow in the workspace and trying to open with designer by right-click on the workflow.json > select "open in designer" option.

But it is showing the below error:

What is this error stating about and how to resolve this issue?

Update 1: Tried removing the dependencies folder in the .azurelogicapps directory in the local user profile as instructed in this GitHub issue #3925. Still, the same issue occurring.

I have the latest Azure Functions Core Tools (x64 bit) version installed in my system.

Currently, your root folder is vivkesalaws, and testala101 is a subfolder; that's why VS Code is complaining about the project root.

testala101 must be the root folder in your project. You might encounter other problems after that 😊 but at least this error will be resolved.

Example: