If break/pause is enabled when using the main leonardo serial port VS misses the fact that the Leonardo is waiting for F5 (continue).

This has the effect of making it seem like the Arduino is not running. There will be a minor update shortly in the meantime please use the following workaround. 

Workaround

When the debugger has started the serial monitor will open. Type the letter "c2 into the serial monitor single line textbox and press the envelope button to the right.

Sending the letter "c" to the arduino forces what F5 normally does to "Continue" a debug session.

Once the arduino has "continued" once, debugging should be fully working.