If your device is available in the nRF Connect for VS Code extension's list of connected devices and you assigned it a custom device name, this name will now be used as the terminal name when you create an RTT or serial terminal.
If your device is available in the nRF Connect for VS Code extension's list of connected devices and you assigned it a custom device name, this name will now be used as the terminal name when you create an RTT or serial terminal.