It's been ages since I last used VSCode but I do recall the C# debugger being nonfree, and only licensed for Visual Studio branded software (which would exclude your own builds of code). I also recall a post of someone being unable to use the Python extension because they had an 'unofficial build' of code. So unless things have changed a lot since I last used it, it would seem that the program itself is open source but some extensions that you sort of need in order to get on with your work are non-free.