The build and release pipeline doesn't work for extensions in sub directories.
What goes wrong is the published artifacts from the build https://dev.azure.com/devdiv/DevDiv/_build/results?buildId=12974473&view=artifacts&pathAsName=false&type=publishedArtifacts
The artifacts are organized like this for the /azure helper extension

And then when we go to release it, the release pipeline doesn't know where to look in the build artifacts to find the vsix and correct package.json.
Correct fix is to move to Brandon's new signing/release pipeline design. But a short term fix might be to add a new variable/parameter to the release pipeline that tells the release pipeline where to look for the release artifacts within the build artifacts.
Failed release example: https://dev.azure.com/devdiv/DevDiv/_build/results?buildId=12974566&view=results