JUST DON'T USE THEM

nes recommended jupytext, but using the gitlens plugin it is workable. see VS Code Tipps and Tricks#Git diff

I have found a much better alternative: Python Interactive Windows. Git Diff, Merge etc are a total breeze. I would even argue, that it is equivalent/slightly better than default Jupyter Notebooks for visualizations. Gitlens is still an interesting tool.