nRF SDK v2.9.0 fails to install in VSCode Extension

I have tried to install latest version of toolchain and SDK (2.9.0) using VSCode.

Toolchain works, but SDK gives me HTTP errors on 'west update' (see log file with extension console output: 

[08:24:24] nRF Command Line Tools 10.24.2 are up to date
[west]: === Initializing in /Volumes/Data/Opt/nordic/ncs/v2.9.0
[west]: --- Cloning manifest repository from https://github.com/nrfconnect/sdk-nrf
[west]: Cloning into '/Volumes/Data/Opt/nordic/ncs/v2.9.0/.west/manifest-tmp'...
[west]: Updating files:  88% (11097/12482)
Updating files:  89% (11109/12482)
Updating files:  90% (11234/12482)
Updating files:  91% (11359/12482)
Updating files:  92% (11484/12482)
Updating files:  93% (11609/12482)
Updating files:  94% (11734/12482)
Updating files:  95% (11858/12482)
Updating files:  96% (11983/12482)
Updating files:  97% (12108/12482)
Updating files:  98% (12233/12482)
Updating files:  99% (12358/12482)
Updating files: 100% (12482/12482)
Updating files: 100% (12482/12482), done.
[west]: --- setting manifest.path to nrf
[west]: === Initialized. Now run "west update" inside /Volumes/Data/Opt/nordic/ncs/v2.9.0.

[west]: exited with code 0.


[west]: updating /opt/nordic/ncs/v2.9.0...

[west]: === updating zephyr (zephyr):
[west]: --- zephyr: initializing
[west]: Initialized empty Git repository in /Volumes/Data/Opt/nordic/ncs/v2.9.0/zephyr/.git/
[west]: --- zephyr: fetching, need revision v3.7.99-ncs2
[west]: error: RPC failed; curl 92 HTTP/2 stream 5 was not closed cleanly: CANCEL (err 8)
[west]: error: 3398 bytes of body are still expected
[west]: fetch-pack: unexpected disconnect while reading sideband packet
[west]: fatal: early EOF
[west]: fatal: fetch-pack: invalid index-pack output
[west]: FATAL ERROR: command exited with status 128: fetch -f --tags -- https://github.com/nrfconnect/sdk-zephyr v3.7.99-ncs2
)

If I do it manually from command line it works fine, but then the VSCode extension does not recognize the manually installed SDK (I have installed it in the default /opt/nordic/ncs/v2.9.0 folder)

Can I make the extension recognize my manually installed SDK?

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