I've set my external editor to VSCode, and if I right click over a wrangle VEXpression window and select Expression->Edit in External Editor, VSCode pops up just fine. However, I've assigned a hotkey ( Alt-E ) to the action and the standard Houdini snippet editor pops up.

Any way to fix this?

That's happening to me as well.
did you find any workaround?

I suppose one of you could log a bug for it if you wanted SideFX to fix it.

You can have it both ways. To access your external Text editor immediately keep pointing to it in your .env file. Additionally, go to Preferences > Scripting and tick "Edit Strings and Expressions Using External Editor". Hope this helps

PERFECT!!!! That absolutely fixes this problem! Thanks so much for the response!