VS Code is not an IDE. It's a Chromium notepad with a file browser attached.
With a graphical debugger, built-in terminal, rich extension architecture, the ability to compile and run programs, git integration, language server infrastructures — and yes, a file browser, a reasonable argument can be made that VS Code is an "IDE".
And it is indisputably more similar to IDEs like IntelliJ, Eclipse, or Xcode than it is to Notepad.
Isn't that pretty much what you are saying?