This was already installed when you ran Claude Code in a VSCode terminal, I guess the difference is that now it's explicitly listed on the VSCode Marketplace.
You can select lines, which will be added to the context (can't do that from the console), it can show the edited files in the VSCode editor, not just in the terminal.
The extension say "Tab awareness: Claude can see which files you have open in the editor" I don't know how to activate this, it would help me to not have to CD in the terminal each time
Ok so I tested it by CD into a directory, and open a file from another directory, create an empty function and selecting the function in the editor, and asking claude to just "fill the function" it knew which text was selected in which file and filled the function, this will gain me some time