Workspace path error when using Docker Desktop for Mac with VSCode devcontainers extension

[kphunter]

azd up fails when using Docker Desktop for Mac (4.36.0, default settings) with VSCode devcontainers extension:

 ✔ Container azure-postgres-pgvector-python_devcontainer-db-1          Started1.0s  
 ⠙ Container azure-postgres-pgvector-python_devcontainer-app-1         Starting0.4s 
Error response from daemon: Mounts denied: 
The path /workspaces/azure-postgres-pgvector-python is not shared from the host and is not known to Docker.
You can configure shared paths from Docker -> Preferences... -> Resources -> File Sharing.
See https://docs.docker.com/desktop/settings/mac/#file-sharing for more info.

"Settings" -> "Resources" -> "File sharing" shows /tmp is shared by default.