I have looked everywhere and I still have issue debugging TypeScript inside VS Code. I have read this thread but still I am not able to hit my breakpoints placed inside a Ty
Using Angular I have found that I always point my folder directory to the src folder - that way my work-space is not so cluttered with root files that I never use. But this has given me several problems in the past especially when using VSCode, since many of the functionality seems to me to look at the folder structure, and start from there to run your files. (Expecting some of the missing files)
So I had this exact same problem with this error message, and learning from past experience I realized that I opened my project one folder deep, instead of the root folder. So I just closed my project and opened it one folder up (so that all the other files are also included in the folder structure) and my problem was immediately fixed.
I also believe that many of the above answers about changing your files and folder structure are workarounds to this problem of not opening your work project at the root folder, what ever framework/language you are using.