my conf works for my project, are you in the right folder ? You should go in the folder where is your app.py, look my cwd var:

{
    "name": "Chalice: public-api",
    "type": "debugpy",
    "request": "launch",
    "program": "${env:CHAT3D_BACKEND_VENV_PATH}/bin/chalice",
    "args": [
        "local",
        "--no-autoreload"
    ],
    "cwd": "${workspaceFolder}/public-api"
}