Prettier not formatting HTML files in VS Code

Same for me. I managed to solve it as follow:

{
    "editor.formatOnSave": true,
    "editor.formatOnPaste": true,
    "editor.formatOnType": true,
    "editor.defaultFormatter": "esbenp.prettier-vscode",
    "[html]": {
        "editor.defaultFormatter": "vscode.html-language-features"
    }
}

This allowed me to use prettier globally and use built in html formatter for html.
Also allowed the formatting to happen on save and while typing.

The part responsible for Prettier formatting html

  "[html]": {
            "editor.defaultFormatter": "vscode.html-language-features"
        },