Update connection docs for new sidebar and editor UI (#282)

Co-authored-by: Claude Opus 4.6 <noreply@anthropic.com>

Author: mtoy-googly-moogly

src/documentation/setup/config.malloynb

@@ -28,7 +28,7 @@ The `is` field identifies the connection type. All other fields are type-specifi
 
 ### Where the config file lives
 
-- **VS Code Extension** — place `malloy-config.json` in your workspace root. The extension detects it automatically and picks up changes on save. In multi-root workspaces, each root can have its own file.
+- **VS Code Extension** — place `malloy-config.json` in your workspace root. The extension detects it automatically and picks up changes on save. In multi-root workspaces, each root can have its own file. You can also set a global fallback directory via the `malloy.globalConfigDirectory` setting (e.g. `~/.config/malloy`) — this is used when no workspace config file exists.
 - **Malloy CLI** — `~/.config/malloy/malloy-config.json`. See the [CLI setup](cli.malloynb) for details.
 
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@@ -145,9 +145,9 @@ SET search_path TO analytics; CREATE TEMP TABLE foo AS SELECT 1;
 
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-## Sensitive Values
+## Environment Variables
 
-Fields with type `password` or `secret` contain sensitive values like credentials and API tokens. Instead of putting these directly in your config file, you can use an environment variable reference:
+Any property value can be replaced with an environment variable reference. This is especially useful for sensitive values like passwords and API tokens, so they don't need to appear directly in your config file:
 
 ```json
 {

src/documentation/setup/database_support.malloynb

@@ -12,7 +12,7 @@ Malloy connects to a variety of databases. This page provides an overview of sup
 | [BigQuery](../language/dialect/bigquery.malloynb) | `bigquery` | OAuth or service account authentication |
 | [Snowflake](../language/dialect/snowflake.malloynb) | `snowflake` | Password or RSA key authentication |
 | [PostgreSQL](../language/dialect/postgres.malloynb) | `postgres` | Standard credentials |
-| [MySQL](../language/dialect/mysql.malloynb) | `mysql` | Environment variables only (VS Code) |
+| [MySQL](../language/dialect/mysql.malloynb) | `mysql` | Standard credentials |
 | [Trino / Presto](../language/dialect/presto-trino.malloynb) | `trino` / `presto` | Server URL + optional auth |
 
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src/documentation/setup/extension.malloynb

@@ -48,9 +48,19 @@ The Malloy Extension also works in VS Code Web environments like github.dev. Pre
 There are two ways to configure database connections:
 
 1. **`malloy-config.json`** (recommended) — a project-level config file checked into source control
-2. **VS Code Settings** — user-level configuration via the command palette
+2. **VS Code Settings** — user-level configuration via the Connections sidebar
 
-**Note:** If a `malloy-config.json` exists in your workspace root, VS Code settings for connections are ignored entirely — all connections come from the config file.
+When both exist, config file connections take priority. Settings connections are used as a fallback for any connection names not defined in the config file.
+
+### Connections Sidebar
+
+The **Malloy Connections** sidebar shows all configured connections grouped by source:
+
+- **Config** — Connections from discovered `malloy-config.json` files. These are read-only in the editor; edit the JSON file directly to make changes.
+- **Settings** — User-defined connections from VS Code settings. Editable through the connection editor. If a settings connection has the same name as a config connection, it appears as "(shadowed)" since the config version takes priority.
+- **Defaults** — One entry per supported database type, using built-in defaults. Click to create a new settings connection from the default.
+
+Click any connection to open the connection editor, or use the **+** button to create a new connection.
 
 ### Project Configuration: `malloy-config.json`
 
@@ -60,18 +70,31 @@ See **[Configuration](config.malloynb)** for the full config file format, connec
 
 ### VS Code Settings
 
-You can also configure connections through the VS Code command palette:
+You can also configure connections through the Connections sidebar or the command palette:
 
 1. Open Command Palette: `Cmd+Shift+P` (Mac) or `Ctrl+Shift+P` (Windows/Linux)
 2. Type: **Malloy: Edit Connections**
 3. Click **Add Connection** and select your database type
 4. Fill in the connection details
 
-VS Code stores these in your user settings:
+Sensitive values (passwords, tokens) are stored securely in your system keychain.
+
+### Connection Editor
+
+The connection editor lets you view and manage individual connections:
+
+- **Test** — Verify the connection works with the current settings
+- **Duplicate** — Create a copy of an existing connection
+- **Delete** — Remove a settings connection
+
+Config file connections open in a read-only view. You can still test them, but edit the JSON file directly to change settings.
+
+### Connection Settings
 
-**Mac:** `~/Library/Application Support/Code/User/settings.json`
-**Windows:** `%APPDATA%\Code\User\settings.json`
-**Linux:** `~/.config/Code/User/settings.json`
+| Setting | Description | Default |
+|---------|-------------|---------|
+| `malloy.globalConfigDirectory` | Directory containing a global `malloy-config.json`, used as a fallback when no workspace config file exists (e.g. `~/.config/malloy`) | `""` |
+| `malloy.projectConnectionsOnly` | Only use workspace config file connections — hides global config, settings, and defaults | `false` |
 
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