Is Microsoft dropping support for SDF database files in Visual Studio?

The answer is yes: Microsoft is silently dropping support (as usual IMHO) to Sql Compact Edition.

It started abandoning Sql CE 3.5 in Vs2012
It continued dropping Sql CE in Sql Management Studio 2012
and finally in VS2013

You can use CompactView or install SQL Server Compact Toolbox extension in VS2013 or (my prefered solution) use Sql management Studio 2008

UPDATE thanks to Nicolas’ comment

As stated by Microsoft:

SQL Server compact edition is in deprecation mode with no new releases
planned near future. Last release SQL CE 4.0SP1 (and earlier releases
that are still in the support cycle) will continue to be supported
through its lifecycle and Microsoft is committed to fix any major,
production blocking issues found in these releases.

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