I do and I know other developers who do it. On multiple projects I've worked on we had a dev server and production server, cloud instances on AWS or GCP. Developers work over ssh on the dev server (in their own copy of the web app), either with ssh+vim or VSCode over ssh. Deployment to production amounts to a git pull and maybe updating the database schema.

Advantages: Controlled dev environment. No more days-long getting the app to work on a new developer's laptop. Can change dev environment and tools in one place. All developers can see each other's work and collaborate at any time. Dev environment identical to production and easy to refresh as needed.

Disadvantages: Network latency, though less of a problem that I expected. Must have internet connection to work (at least to see the changes and test). A more subtle disadvantage is a lot of developers can't use the Linux command line at all, or not effectively, and some sulk about having to learn "the terminal."

If I know I'll be traveling or without internet I can git pull the source and work on my laptop with no internet connection, the rsync to my dev instance later.