After upgrading to the latest version of volar to "Vue - Official", my html custom element intellisense stopped working. This feature was enabled by adding a setting to my .vscode/settings.json file called html.customData. It enabled me to have intellisense for custom elements.

example:

"html.customData": [
    "./node_modules/@esri/calcite-components/dist/extras/vscode-data.json"
  ],