Is there a way to set up the Apex Interactive Debugger for VS Code for free in a Developer Edtion org? I'm a little confused on how to get started using this feature. Any guidance would be appreciated.
No, but you can use the Apex Replay Debugger from the Salesforce Extension Pack to use a replay mechanism. The Apex Interactive Debugger requires an Apex Debugger license in your Dev Hub when debugging Scratch Orgs, or can be used by ISV to debug subscribers' Sandboxes. The Replay Debugger uses the logs generated from a transaction to simulate running through the transaction.