Why does VS Code give linting errors for a valid Azure Pipelines YAML file?

I have a valid pipeline.yaml that succeeds when it is ran in a DevOps Pipeline. But when I edit it in VS Code, I get squiggly lines on following code:

stages:
- stage: deployResources
  displayName: 'Deploy resource group'
  jobs:
  - job: deploymentGroup
    displayName: 'run deployment group'
    steps:
    - task: AzureResourceManagerTemplateDeployment@3 <-- this whole section
      inputs:
        ...

The popup says:

String does not match the pattern of "^PowerShell@2$".yaml-schema: Azure Pipelines

Like this:

I have Microsoft's Azure Pipelines extension installed. Can somebody confirm if they have the same behavior - is it a bug in the extension or something wrong in my local setup?

Testing on my side, it works fine without any warning or error.

To resolve the issue, you can try the followings:

1. Update extension "Azure Pipelines" to the latest version. I am using version 1.249.0.

2. Uninstall and re-install this extension.

If they don't work, share your completed AzureResourceManagerTemplateDeployment@3 task.