Actual Use

When you finish to write your whole document, you can format it to be hard wrap lines using this way.

As of 2020 and if you're using the Prettier - Code formatter plugin:

Go to Plugins -> Find Prettier -> Cog -> Extension Settings -> Prettier: Print Width Fit code within this line limit and set to whatever you want. By default it's 80.

When you save the file, Prettier will format automatically.

Now VSCode support auto "soft" wrapping out of the box.

Settings --> Text Editor --> Last 3 options (as on today) is for autowrapping.

By default Word Wrap is off.

Soft Wrap Code

Add the following setting (replace column width with your preference): "editor.wordWrapColumn": 100

Then add either "editor.wordWrap": "wordWrapColumn" (wraps at the column) or "editor.wordWrap": "bounded" (wraps at either the column or the viewport).

Hard Wrap Comments and Soft Wrap Code

Unfortunately the extension and VSCode settings do not play nicely.

Feel free to upvote this feature request .

Most of these didn’t work for me, but I found the extension Vsctoix , which does.

We start out with line breaks at column 80:

Mechanisms such as a “windfall clause” help distribute riches within particular 
futures. But for a windfall clause to be useful, many conjunctive assumptions 
have to be true. We present a new method to borrow against potential future 
windfalls today, when they have greater marginal use. The method also increases 
the probability and thus the expected value of the windfalls.
Then we execute “IX: Join Lines” (no parameter):
Mechanisms such as a “windfall clause” help distribute riches within particular futures. But for a windfall clause to be useful, many conjunctive assumptions have to be true. We present a new method to borrow against potential future windfalls today, when they have greater marginal use. The method also increases the probability and thus the expected value of the windfalls.
And then “IX: Break Line At” with parameter 100:
Mechanisms such as a “windfall clause” help distribute riches within particular futures. But for a 
windfall clause to be useful, many conjunctive assumptions have to be true. We present a new method 
to borrow against potential future windfalls today, when they have greater marginal use. The method 
also increases the probability and thus the expected value of the windfalls.
It would be neat if it respected paragraph breaks and did both steps at once, but so far it’s the only extension that works for me – except I haven’t tried the vim emulation yet.
You can do this without any extension.  You just use two regex search-and-replace.
Isolate the lines you want to rewrap by moving them to a separate file.
Join all the lines into one line. For example, ctrl+h, "\n" ==> " ".  Note: make sure regex is enabled (the dot star icon)
Split the line into multiple lines. For example, ctrl+h, "(.{100}) " ==> "$1\n".  Notice the space after the paren.
Copy the lines back to the original file.
There are many variations on this technique. For example, you could using comma instead of space  "(.{100})," ==> "$1,\n". You could use Find in Selection alt+L instead of using a temp file.
Edit: (below answer might be for a soft wrap, see here for difference between soft and hard wrap: https://stackoverflow.com/a/319932/9481613)
In my version it is Preferences -> Settings then scroll down to "Editor: Word Wrap" where a dropdown box is available from which I selected wordWrapColumn.  After choosing this and closing, when I click on View now at the bottom it says Word Wrap Alt+Z.
You can easily set the column limit using ColumnLimit member in C_Cpp.clang_format_fallbackStyle in settings.json (You have to install Microsoft C/C++ extension)
"C_Cpp.clang_format_fallbackStyle": "{ BasedOnStyle: WebKit, IndentWidth: 4, ColumnLimit: 80 }",
Then you can format the file using Shift + Alt + F
There are many options you can change in this format feature
"C_Cpp.clang_format_fallbackStyle": "{ BasedOnStyle: WebKit, UseTab: Never, IndentWidth: 4, TabWidth: 4, BreakBeforeBraces: Attach, AllowShortIfStatementsOnASingleLine: false, IndentCaseLabels: false, ColumnLimit: 80, AccessModifierOffset: -4 }",
Name of the predefined style used as a fallback in case clang-format
is invoked with style file but the .clang-format file is not found.
Possible values are Visual Studio, LLVM, Google, Chromium, Mozilla,
WebKit, Microsoft, GNU, none, or use {key: value, ...} to set specific
parameters. For example, the Visual Studio style is similar to: {
BasedOnStyle: LLVM, UseTab: Never, IndentWidth: 4, TabWidth: 4,
BreakBeforeBraces: Allman, AllowShortIfStatementsOnASingleLine: false,
IndentCaseLabels: false, ColumnLimit: 0, AccessModifierOffset: -4,
NamespaceIndentation: All, FixNamespaceComments: false }
Before
void Proc::Memory::getSramOff(const char* mem_name, uint dataSize, uint addrBits, uint& noOfBytes, uint& sram_off)
After
void Proc::Memory::getSramOff(const char* mem_name, uint dataSize,
    uint addrBits, uint& noOfBytes, uint& sram_off)
        
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