Activation event for Salesforce official extension is it looks for the file sfdx-project.json file in the workspace.Hence make sure you have the sfdx-project.json in the project workspace root folder.
Also make sure you have .sfdx folder and also have sfdx-config.json file with defaultusername set .
Also try to reload the project using the reload command in command Palette.If issue still persists feel free to post what your project structure looks like.
Also yes I created another extension because official extension has few issues that they are trying to figure still
1.Performance issues for saving single files .You can easily compare that what I have today is atleast 2X faster than what you get from official extension .
This is because they use Metadata api even for single file deploy which as per salesforce has performance issues and they plan to fix it in upcoming release .
2.The package.xml generation is easier using change sets or unmanaged package container and official extension does not offer good GUI to generate them .
3.Official extension uses apex lang server for auto completion that almost consumes lot of my CPU .I would rather not have autocomplete than an extension trying to consume my whole CPU .
4.Official salesforce extension does not manage conflict with server for Non scratch orgs like sandboxes .Its in their roadmap .
5.Salesforce recommends using the new source format which i too recommend however if you are finding issues with that format the extension i have supports both DX typed source format and traditional source format .
Overall the idea of me building an extension was not to replace salesforce official extension instead supplement it with some missing capabilities till salesforce figures all of them .