I have git version 2.32.0.windows.2, VSCode version 1.68.1 and CodeLens doesn't show up when there are conflicts.
Git recognizes the conflicts but VSCode somehow fails to show me the conflict so I can't manage it with CodeLens.
The image is not that self explanatory, but it seems like the left part where some code should be shown is empty, and in the original README.md file, the usual UI where you can select which changes to keep and discard is simply not there.