This tool can be especially helpful for Drupal projects when combined with Chrome Developer Tools Elements tab as Drupal will include comments in the html for which twig templates it attempted to look for and which it actually used. This allows you to quickly locate the specific file that was used without having to know where it exists within the project.
You can also use the file search to quickly get a list of all files of a particular type. For example if you wanted to find all node related twig template files, you could search for “node.html.twig”. At the top of the resulting list will be all files that most closely match your search string, but it will also include any files that have all characters of your string in that order regardless of other characters in between. This is especially useful in the “node.html.twig” example in that it will also include any file that looks like “node–<content_type>--teaser.html.twig” aiding in locating any twig file that a node may attempt to pull form.
Text Search
Though the top search bar can be used to search your project for a specific string, VS Code includes a more user-friendly way of doing this with the sidebar Search area. This can be accessed by using the sidebar link or by using the Command-Shift-S shortcut.