• VSCode Version: 1.38.0
• OS Version: 10.14.6
• TypeScript version: tested with both 3.5.2 and 3.6.2

Steps to Reproduce:

./tsconfig.json:

{
    "references": [
        { "path": "./src/tsconfig.json" },
        { "path": "./shared/tsconfig.json" }
    ],
    "files": []
}

./shared/tsconfig.json:

{
    "compilerOptions": {
        "composite": true,
        "declarationMap": true,
        "outDir": "../target-shared/"
    }
}

./shared/main.ts:

export const foo = 1;

./src/tsconfig.json:

{
    "compilerOptions": {
        "composite": true,
        "declarationMap": true,
        "outDir": "../target-src/"
    },
    "references": [
        { "path": "../shared/tsconfig.json" }
    ]
}

./src/main.ts:

import { foo } from "../shared/main";

foo;

1. Run tsc --build (observe no errors)
2. Open VS Code
3. Navigate immediately to ./shared/main.ts
4. Find references for foo

Repo including the above test case: https://github.com/OliverJAsh/unsplash-ts-project-references/tree/orthogonal-folders

Expected: reference in ./src/main.ts appears
Actual: reference in ./src/main.ts does not appear

Also, renaming foo in ./shared/main.ts does not propagate the change into ./src/main.ts.

If I'm careful enough to navigate to ./src/main.ts first, and then open ./shared/main.ts afterwards, VS Code is aware that foo is used in both files. However, I don't believe this should be necessary.

When I open ./shared/main.ts, I assume VS Code is stopping at ./shared/tsconfig.json and looking no further. If it looked one level higher, it would find ./tsconfig.json, which references ./src/tsconfig.json, which in turn references ./shared/tsconfig.json.

Does this issue occur when all extensions are disabled?: Yes

Potentially related:

• Allow to specify the tsconfig.json filename explicitly  #12463
• Project references are not picked up (1) #80423
• TypeScript: aggregate errors for file from all projects TypeScript#20185
• Find references even when TypeScript sub-projects not yet open TypeScript#30823
• [WIP] Open bigger set of configured projects when opening composite project for operations that operate over multiple projects like rename TypeScript#28261
• For editing experience, use source instead of .d.ts files from project references TypeScript#32028