Update README to explain the file watcher issue

Author: KidkArolis

README.md

@@ -1,12 +1,32 @@
 # rescript-zed
 
-ReScript support for [Zed](zed.dev) editor.
+ReScript support for [Zed](https://zed.dev) editor.
 
 This extension plugs in the following projects:
 
 - [tree-sitter-rescript](https://github.com/rescript-lang/tree-sitter-rescript) parser
 - [@rescript/language-server](https://github.com/rescript-lang/rescript-vscode) LSP
 
+## IMPORTANT
+
+Starting from ReScript language server v1.64.0, the internal file watcher (chokidar) was removed ([PR #1096](https://github.com/rescript-lang/rescript-vscode/pull/1096)). The LSP server now expects the editor to watch for file changes and notify the server via the standard LSP `workspace/didChangeWatchedFiles` mechanism.
+
+**Recommended workaround** Since this is not currently implemented in this extension it is recommended to pin rescript-language-server to 1.62.0, which is the last version that includes the built-in chokidar file watcher:
+
+```json
+{
+  "lsp": {
+    "rescript-language-server": {
+      "settings": {
+        "version": "1.62.0"
+      }
+    }
+  }
+}
+```
+
+We're tracking this issue in [#12](https://github.com/humaans/rescript-zed/issues/12).
+
 ## Settings
 
 ```json
@@ -31,7 +51,7 @@ With `version` you can point to a specific npm version of the [@rescript/languag
 
 ## Developing
 
-Zed and it's support for extensions is being actively developed. The current workflow that can be used to build this extension locally and install it into Zed is:
+Zed and its support for extensions is being actively developed. The current workflow that can be used to build this extension locally and install it into Zed is:
 
 Clone zed and build the `zed-extension` cli: