I think VS Code is doing its own thing and it might be better if you create your own. It doesn’t have to be called .venv, that is just a VS Code convention.

python -m venv myenv

and then

source myvenv/bin/activate

should do it.

Otherwise there is something wrong in your path or a weird python installation.

python --version should give you a version number 3.4 or above, because these have venv included and need no additional pip installs