VSCode is built on open source of course, but the the OSS version is "Code - OSS". When Microsoft builds it and releases it, it becomes VSCode with the Visual Studio trademark and what not.
PearAI's Code fork is using the real VSCode marketplace which has strict "This has to be used with Visual Studio products" (well, and some other MS / GitHub bits), so they can't use that. If you look at other VSCode-adjacent editors, they all use open-vsix.org instead.
They also use extensions that are licensed in the same way:
https://trypear.ai/blog/wsl-setup
They have instructions on setting up the WSL extension...which has a "This can only be used in Visual Studio Code" License too, so it can't be used in their PearAI fork.
You can see some examples of the terms of use / LICENSEs here:
https://cdn.vsassets.io/v/M190_20210811.1/_content/Microsoft...
https://marketplace.visualstudio.com/items/ms-vscode-remote....
It just shows a complete lack of regard for licensing...