The launch.json file was the configuration of debugging, you can find it under '.vscode' folder. If you have not it, you can open Deubg panel(Ctrl+Shift+D) and click 'create a launch.json file' to create a launch.json file.
The launch.json file can contain a multi debug configurations located in "configurations" property and was separated by '{},'. In the Debug panel(Ctrl+Shift+D) you can choose different configurations to apply to debug.
Then you can easily understand how to apply the Options you mentioned to configure the launch.json file.
Such as this is the default configuration of java debug:
{
"type": "java",
"name": "Debug (Launch) - Current File",
"request": "launch",
"mainClass": "${file}"
},
Some configurations belong to VSCode, some were provided by the extension which you have activated.
In this example, 'type', 'name', 'request' was provided by the VSCode, you can refer to this page to know the means of them and to find out more VSCode related configurations.
And what you have mentioned configuration in readme, was provided by the 'Java' extension, they are extension related. Such as 'mainClass' in this example.
You can refer to Java-Run and Debug and Debugging of VSCode page for the details of What I am talking about.