@David Hockenbroch 
We just improved the UI for creating a new server-side editing workspace folder. If you have no workspace open, you can follow the steps here to create a new one. If you do, you can add a new folder to you workspace by right-clicking in the file explorer and selecting "Add Server Namespace to Workspace..". That command will follow steps 4 and on. To see CSP files, select "Web Application Files" in the menu from step 8. To see basic files, select "code files in <NS>", then select "Filter", then make sure your custom filter contains the "*.bas" pattern. It can include other file types as well.

Did you export those files using the VS Code extension? The extension uses its export settings to determine where it will look for local copies. For example, if you have the AXIS folder open in VS Code you would need the following export settings to reflect the existing folder structure that you have: objectscript.export.folder setting equal to "", objectscript.export.atelier setting set to true, and objectscript.export.addCategory setting set to false.

I believe this is the same problem described here. You need to add the --check-caps false command to the iris container in your docker-compose.yml file, like this:

...
iris:
    command: --check-caps false
    init: true
...

The SAM 1.1 distribution should have this done for you but that change must not have made it in. I think you can still enter the SAM 2.0 EAP if you'd like to start with the upcoming version.