These things will never be completely safe, from version to version, to new management. As Darth Vader one said, "I am altering the deal."

If you want the same thing but not as sketchy you can check out Cursor. You pay them, so it's a little more transparent what they're getting out of it.

VScode phones home… what's the difference?

Use something like emacs/vim/kate/eclipse/qtcreator if you want to avoid "phone home" software.

Unless you are using self hosted llm, you can assume all the code is being sent to the server. This is true for all similar services.