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Visual Studio can identify the outdated version of Azure Functions core tools in the following ways:

1. In the Solution Explorer window, open the project that uses Azure Functions.

2. Right-click on the project and select "Manage NuGet Packages..."

3. In the NuGet Package Manager, select the "Updates" tab.

4. Look for the "Microsoft.Azure.WebJobs.Core.Tools" package in the list of packages. If there is an updated version available, it will be listed here.

5. Alternatively, Visual Studio may also display a notification in the bottom right corner of the screen indicating that there is an updated version of Azure Functions core tools available.

6. Additionally, you can run the command "func --version" in the Command Prompt or PowerShell to check the version of the Azure Functions core tools installed on your machine. If you have an outdated version, Visual Studio will also display a notification asking you to update the tools.