System color theme is not picked up

Hey, this is a known issue. Auto Detect Color Scheme needs you to manually set your preferred themes for Light and Dark mode.

Workaround:

  1. Open Settings Cmd+,
  2. Search for window.autoDetectColorScheme and make sure it’s enabled
  3. A bit below, find workbench.preferredDarkColorTheme and workbench.preferredLightColorTheme, then pick the themes you want for each mode

After that, switching with the system theme should work.

More details in a similar thread: Auto Detect Color Scheme not working on MacOS

Let me know if it still doesn’t help.