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The extension added a keybinding for the "enter" key with no "when" parameters, so it completely hijacks the enter key. You can go to Preferences>Keyboard Shorcuts and look for vscode-styled-components under the source column. Remove that key binding and you should be good to go.
After installing the extension, the enter key does not work properly. Hope you can fix it one day soon.
https://stackoverflow.com/questions/75896153/cannot-create-line-break-with-enter-key-in-vs-code
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