AWS SAM Template.yaml deploy does not use-container from launch.json in VSC

Question

Using Visual Studio Code (VSC), I can get my Lambda's running locally and they build in a container, but when I go to deploy a container is not used, it's almost like it's ignoring the launch.json file. Are there other parameters I need to add for a deployment to work? The problem in the end is that Python is not found.

When debugging locally

2022-05-09 23:17:19 [INFO]: Preparing to debug locally: Lambda "app.lambda_handler"
2022-05-09 23:17:19 [INFO]: Building SAM application...
2022-05-09 23:17:19 [INFO]: Running command: (not started) [C:\Program Files\Amazon\AWSSAMCLI\bin\sam.cmd build --build-dir C:\Users\user\AppData\Local\Temp\aws-toolkit-vscode\vsctkqEogcB\output --template C:/code/MyProject/template.yaml --use-container --manifest C:\Users\user\AppData\Local\Temp\aws-toolkit-vscode\vsctkqEogcB\debug-requirements.txt]
2022-05-09 23:17:23 [INFO]: Starting Build inside a container

2022-05-09 23:17:23 [INFO]: Building codeuri: C:\code\MyProject\get-weather runtime: python3.7 metadata: {} architecture: x86_64 functions: ['GetWeatherFunction']

2022-05-09 23:17:24 [INFO]: 
Fetching public.ecr.aws/sam/build-python3.7:latest-x86_64 Docker container image....
2022-05-09 23:17:24 [INFO]: ..
2022-05-09 23:17:24 [INFO]: 
Mounting C:\code\EarthwiseGlobal\get-weather as /tmp/samcli/source:ro,delegated inside runtime container

When doing a deployment

2022-05-09 23:21:31 [INFO]: Starting SAM Application deployment...
2022-05-09 23:21:31 [INFO]: Building SAM Application...
2022-05-09 23:21:31 [INFO]: Running command: (not started) [C:\Program Files\Amazon\AWSSAMCLI\bin\sam.cmd build --build-dir C:\Users\user\AppData\Local\Temp\aws-toolkit-vscode\samDeployLHRBc5\build --template c:\code\MyProject\template.yaml]
2022-05-09 23:21:35 [INFO]: Building codeuri: c:\code\MyProject\get-weather runtime: python3.7 metadata: {} architecture: x86_64 functions: ['GetWeatherFunction']

2022-05-09 23:21:35 [INFO]: requirements.txt file not found. Continuing the build without dependencies.

2022-05-09 23:21:35 [INFO]: 
Build Failed

2022-05-09 23:21:35 [INFO]: Error: PythonPipBuilder:Validation - Binary validation failed for python, searched for python in following locations  : ['C:\\Users\\user\\AppData\\Local\\Microsoft\\WindowsApps\\python.EXE', 'C:\\Users\\user\\AppData\\Local\\Programs\\Python\\Python310\\python.EXE'] which did not satisfy constraints for runtime: python3.7. Do you have python for runtime: python3.7 on your PATH?

Template.yaml

AWSTemplateFormatVersion: '2010-09-09'
Transform: AWS::Serverless-2016-10-31
Description: MyProject Serverless

Parameters:
    ENV:
        Description: 'Required. The environment for the deployment'
        Type: 'String'

Globals:
  Function:
    Timeout: 3    
    Layers:
      - !Sub arn
    Environment:
      Variables:
        ENV: !Ref ENV
    Architectures:
      - x86_64


Resources:
  GetWeatherFunction:
    Type: AWS::Serverless::Function
    Properties:
      FunctionName: get-weather
      CodeUri: get-weather/
      Timeout: 30
      Handler: app.lambda_handler
      Runtime: python3.7
      Policies: 
        - AWSLambdaBasicExecutionRole
        - AmazonSSMReadOnlyAccess

launch.json

{
    "version": "0.2.0",
    "configurations": [
            "type": "aws-sam",
            "request": "direct-invoke",
            "name": "GetWeatherFunction",
            "invokeTarget": {
                "target": "template",
                "templatePath": "${workspaceFolder}/template.yaml",
                "logicalId": "GetWeatherFunction"
            },
            "aws": {
                "region": "us-east-1"
            },
            "sam": {
                "containerBuild": true
            },
            "lambda": {
                "memoryMb": 128,
                "timeoutSec": 10,
                "environmentVariables": {
                    "ENV": "DEV"
                },
                "payload": {
                    "json": {}
                }
            }
        }
    ]
}

settings.json

{
    "python.terminal.activateEnvInCurrentTerminal": true,
    "python.defaultInterpreterPath": "${workspaceFolder}\\.venv\\Scripts\\Python.exe",
    "python.terminal.activateEnvironment": true,
    "terminal.integrated.env.windows": {"PYTHONPATH": "${workspaceFolder}\\.venv\\Scripts\\Python.exe"}
}

SAM version

sam --version
SAM CLI, version 1.46.0