Clippy icons are not shown to files when marking a folder, no context available in the end

[CasperH2O]

Not sure if this is a single issue or two separate ones.

Opening VS Code fresh, nothing marked and clicking an "unexpanded/closed" folder in the EXPLORER will indicate Marked n file(s) for context, but no clippies are shown when expanding the folder.

Then generating the context, I get the warning pop up No marked files. Please mark files before generating context.