Why is VSCode Pylance not seeing modules?

Question

Python

Why does Pylance not see the modules that are in the folder next to it (the code works fine)?

Answer 1

Because functions.py has a different name, judging by the open tab, it is functions.pyW.
Remove the letter W from the file extension

Answer 2

This happens because Pylance relies on packages installed in the virtual environment, and you probably installed your package using local pip and not inside venv