• Node.js 8.9.1 (https://nodejs.org/en/)
• npm 5.5.1 (available in Nodejs 8.9.1)
• Yarn (you can install via the npm command as follows npm install -g yarn)
• Uninstall existing Python extension

• Open terminal in the above extensions directory and run the following commands:
  • git clone https://github.com/Microsoft/vscode-python
  • cd pythonVSCode
  • yarn
• Open VS Code in the above directory (type the following in the terminal (code .)
• Build the extension by going to the menu Tasks->Run Build Task (select Compile)
• Open the file src/client/extensions.ts
• Add break points in the above file any where (starting from the top to the main entry function activate).
• Start debugging using the Launch Extension debug configuration
• This will open a debug instance of VS Code, now open a Workspace and then a python file
• The debugger should now hit your breakpoints.

Note: My suggestion is to add break points to at least the use strict statement (on the top) and start stepping through until it falls over.