Placed zowe.exe in C:\zowe and add C:\zowe to the start of the PATH variable.
The daemon starts and works in vscode CMD terminal.
However it does not work in the VSCode PowerShell terminal.
Release : 4.0
Zowe CLI 7.9.8
PowerShell is pointing toward the intended folder for Zowe CLI.
In vscode PowerShell, issue the following command:
Output shows a file path ending in ".ps1" - PowerShell is prioritizing the PowerShell script for Zowe commands. This is the reason why Zowe daemon can't satrt in PowerShell.