obsidian.css in the vault folder was an early concept. It’s now usually switched off in the settings, since we have switchable themes, which get stored in the (usually hidden) folder .obsidian/themes.
Warning: Always make a copy of the theme CSS you want to edit, and give it another name. Your changes might otherwise be overwritten when you update a theme.
Your newly named theme will be available in the settings under the new name. For some changes, you must restart Obsidian so that they become effective.