Eh, I mean it's a fork. They can keep updating their fork forever. Reality is they want complete control over the product, and VS Code doesn't expose everything in the extension API.
Microsoft still holds the crown when it comes to C# debugging, but for most proprietary MS extensions there are free, open source alternatives. They may not be as polished as the ones Microsoft actually pays people to maintain, but I don't see why Cursor would actually depend on any of the proprietary ones if you're not using it for C# dev (and even there competitors like Jetbrains have figured out a way to make it work).