The Source Diff command allows you to diff metadata types against your default org. This feature makes it easier to visualize the changes between files in your local project and the metadata in your org. You can look at diffs for an individual file or directory.
SFDX: Diff File Against Org and
SFDX: Diff Folder Against Org appear when you right-click a file or folder.
You can then view individual file diffs side by side. If a file doesn’t exist locally or in the Org, it will not show up in the list.