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VSCode is, by default, using their own version of TypeScript. In your case: 4.0.3. However, "jsx": "react-jsx" is only supported starting with TypeScript 4.1. You can change the version though to the version used in your package:
how to find the current version of TypeScript used in VSCode

React version: 17.0.1
Steps To Reproduce
The current behavior
In VS Code their is many syntax error highlight and it says "Cannot use JSX unless the '--jsx' flag is provided.ts(17004)"
The expected behavior
It Should be normal like other version of react usage
Screenshots
tsconfig.json


index.tsx
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