Microsoft is a profit driven business, it never committed to open-sourcing every piece of software it writes, of course they're trying to somehow make money with VSCode, because it costs money to develop it.
If you don't like it choose another one of the billion text editors and IDEs that exist or write a competitive language server, but nobody 'lured you in' or is extinguishing anyone.
This is hypocritical behavior, and it does remind people of EE&E which was Microsoft’s explicit policy in the past. It’s not an exact repeat, but it does seem to rhyme.
How can they prevent my, let’s say vim, client from connecting to a closed-source server if they both speak the same protocol?
This isn't exactly unheard of when it comes to Microsoft. I mean, you don't have to go far to find an example of them doing exactly that -- there's prime example [0] right here in this thread!
(Alsa known as "extend"; see also "Active Directory")
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There's likely more complex licensing restrictions on some of their products. They even allude to this in their answer.
Their marketing or their disciples don't really spell it out when recommending it for obvious reasons.