iamchrishaigh Thank you for the question.
vendor folder is treated "differently" - by default we only index files referenced by composer.json (or more precisely by vendor/composer/installed.json) - so anything copied over there is usually ignored.
To add additional stubs, the best way (as you mentioned) is to use php-stubs composer packages, i.e. using:
composer require --dev php-stubs/woocommerce-stubs
Additional files may be added into vendor or anywhere else on your computer and referenced using "php.workspace.includePath" setting, i.e.:
"php.workspace.includePath": "./vendor/php-stubs;"