Add CHANGELOG and README documentation for workspace recommendations feature

Co-authored-by: garrytrinder <11563347+garrytrinder@users.noreply.github.com>

Author: Copilot

CHANGELOG.md

@@ -12,10 +12,12 @@ and this project adheres to [Semantic Versioning](https://semver.org/spec/v2.0.0
 ### Added:
 
 - Quick Fixes: Enable local language model fix now adds or updates `languageModel.enabled: true` for supported plugins only
+- Workspace: Added automatic prompt to recommend extension in `.vscode/extensions.json` when Dev Proxy config files are detected
 
 ### Fixed:
 
 - Diagnostics: Language model diagnostic now correctly targets plugins that can use a local language model (OpenAIMockResponsePlugin, OpenApiSpecGeneratorPlugin, TypeSpecGeneratorPlugin) and shows as an informational hint instead of a warning
+- Tests: Fixed test fixture path resolution for Windows compatibility
 
 ## [1.12.0] - 2026-01-29
 

README.md

@@ -201,6 +201,12 @@ Shows Dev Proxy status at a glance:
 - Running state (radio tower icon when active)
 - Error indicator if Dev Proxy is not installed
 
+### Workspace Recommendations
+
+When you open a workspace containing `devproxyrc.json` or `devproxyrc.jsonc` files, the extension will prompt you to add it to your workspace's recommended extensions (`.vscode/extensions.json`). This helps teams ensure all contributors have the Dev Proxy Toolkit installed for a consistent development experience.
+
+The prompt appears once per workspace and can be accepted or dismissed. If accepted, the extension will create or update `.vscode/extensions.json` with the recommendation.
+
 ## Configuration
 
 | Setting | Type | Default | Description |