VS Code Extension fails to setup: missing README.md file causes pip install failure

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Bug Description

The VS Code Extension fails to set up correctly due to a missing README.md file that's referenced in the pyproject.toml file. This causes the pip install process to fail during metadata generation.

Error Details

FileNotFoundError: [Errno 2] No such file or directory: '/Users/ryan/.vscode-insiders/extensions/blarify.blarify-visualizer-0.1.0/bundled/README.md'

The full error shows that during pip install -e, the Poetry build system tries to read README.md as specified in pyproject.toml, but the file doesn't exist in the bundled directory.

Additional Issue

The extension is also trying to prompt for ingestion before the setup has finished, which causes additional errors. The ingestion process should wait until setup completes successfully.

Root Causes

1. Missing README.md file in the bundled VS Code extension directory
2. Ingestion process starts before setup completion
3. No proper synchronization between setup and ingestion processes

Reproduction Steps

1. Install the Blarify VS Code extension
2. The extension tries to set up Python environment
3. Setup fails with FileNotFoundError for README.md
4. Extension still tries to run ingestion despite setup failure

Expected Behavior

1. Extension should bundle all required files including README.md
2. Ingestion should only start after successful setup
3. Clear error handling if setup fails

Environment

• VS Code Insiders
• Python 3.13
• Extension version: 0.1.0
• OS: macOS