Support for an experimental version of script setup was added last year, where the export keyword was required. Since then, the RFC has changed. With the stable release of script setup in Vue 3.2, this existing support has been reworked for this feature so you can use it in your project without any issues.
Vue 3 style selectors like :deep and :slotted are now supported.
Other notable improvements:
Added the ability to choose if you want to insert braces on code completion.
Added support for shorthand properties in Angular templates.
Reworked support for Tailwind CSS to make it possible to use JIT mode.