What are everyone's favorite development environments for working with Pico8? What are its pros/cons?

Personally, I enjoy the built-in editor. I always launch from the command prompt to make use of the printh() debugging features.

But I've also messed around with using visual studio code and had a good time there.

This is an interesting question. What brought me to pico 8 was exactly the fact that it has built in editors for everything you have to do. It is so good not having to jump to other programs. But I've used gedit to edit some code on larger projects.

I found that Sublime Text works really well to edit lua code, even directly on the .p8 file. Most notably, it got code completion out of the box and is tolerant to Pico-8's lua-flavor.

I worked with IntellijIdea on Pico-8 projects as well, where you could go as far as having inline documentation: shows parameters and attached comments during code completion. Also it checked the code quite reliably for errors. However, this only worked on native lua code, no support for pico-8 specifics.