(Posting against the right thread this time.)
That’s correct! You can also copy from the formula bar and then paste back into the formular bar if you are just working on one step - which is mostly what I’m doing as it’s a custom step I’m working on.
The only gotchya with working with code from the formula bar is that VSCode identifies that the syntax is incorrect if you leave the leading ‘=’ in (which it technically is). Like is shown in this screen shot.
When I get rid of the leading ‘=’ I can then code as normal, using Shift + Alt + F to apply formatting.
The only drawback is that you need to type column/step names as intellisense doesn’t pick this up from your Power Query instance. (But this is true of all the other tools I’ve seen outside of the PBID editor as well.)