However, I'm not sure who this is for. Downloading and installing an application is not a particularly big ask for the type of people who use VSCode. The browser version will always be a compromised experience, given the inherent limitations of browser applications. Even if it works 99% of the time, that 1% would add enough friction to make it more of a hassle then it's worth.
The post gave some use cases involving hardware that can't easily run Desktop VSCode (e.g. iPads and Chromebooks). I just don't see that being much of a use case though, except in desperate circumstances where a more capable dev machine isn't available.
If there are some use cases I'm missing, I'd love to hear about them! This is a pretty new concept, and I certainly don't know how everyone likes to code. But from my perspective, I struggle to see any situation where someone would choose to use this, and few situations where someone would have to.