Does this occur consistently?
Repro steps:
Action: docker.activate
Error type: EACCES
Error Message: EACCES: permission denied, watch '/Users/nileshk/.docker/config.json'
Version: 1.4.0
OS: darwin
OS Release: 19.5.0
Product: Visual Studio Code
Product Version: 1.47.2
Language: en
Call Stack
FSWatcher.start watchers.js:165:26
Object.watch fs.js:1270:11
new DockerContextManager extension.bundle.js:578:855139
extension.bundle.js:33:376703
processTicksAndRejections task_queues.js:85:5