I found this on the GH repo: "Is this open source? Today no, but the API will be open source to developers at GA."
I'm confused by what "the API" is, exactly. Is WebContainers a technology you plan to make available for others to use node, in the browser, in their own apps?
If they make it Open Source, Microsoft will add it to VScode and eat their lunch.
If they don't, developers might be afraid of lock in.
Best exit for them is to just grow users and not make a decision either way until they get acquired by Github (aka Microsoft) and folded into VScode.
Put the code under the GPL so no one can use it to build proprietary software. Visual Studio Code contains proprietary components, so this would prevent that.