Abhay Chandramouli Thanks for posting your question in Microsoft Q&A. This appears to be a bug in VS code extension for Logic Apps and see that you have opened Azure Logic App Designer | Copy Paste | Mac OS #2326 issue in the right place. Our product team has confirmed the issue (able to repro this) and currently working on the fix. Please follow the issue link for the latest updates (current ETA 2-3 weeks subject to change based on other factors). Sorry for the inconvenience caused by this bug.
Sharing the info for the benefit of community.
If you found the answer to your question helpful, please take a moment to mark it as "Yes" for others to benefit from your experience. Or simply add a comment tagging me and would be happy to answer your questions.