In reference to #18307 & microsoft/vscode-python-debugger#159. Wrapping the environment variable in ${env:<VARNAME>} is currently required to resolve env variables in process's environment. With this we add support to resolve it using ${<VARNAME>}.

Another solution could be to use environment variable substitution/resolution support in the extension where we already follow this syntax. We can expose environment variable fetcher as an API and have the debugger use it to fetch env variables.