I actually worked on VSCode (Python support specifically) at Microsoft in the past, and seeing this kind of thing frustrates me to no end.

The worst part is all the VSCode is still promoted to developers as open source, even though official extensions increasingly aren't, with bits and pieces gradually replaced with closed code. It's not that closed source is necessarily bad, but when F/OSS popularity is milked for marketing purposes while stuff like this happens, it just feels very wrong. If you want to be closed source for reasons, fine, but be honest and upfront about it.