I was able to resolve by changing setting.json file property 'azureFunctions.deploySubpath' to my project name.
"azureFunctions.deploySubpath": "projectname",
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I was trying to create a new project and a function with Python and always getting the error was I select create new local setting file. The error is
Cannot read properties of undefined (reading 'getSubscriptionPromptStep')
I was able to resolve by changing setting.json file property 'azureFunctions.deploySubpath' to my project name.
"azureFunctions.deploySubpath": "projectname",