TLDR the chat.tools.autoApprove VSCode setting which enables autonomous agent behavior is now moved to chat.tools.global.autoApprove and is behind a scary warning a la Mac's "I can't run this program" for unsigned binaries. For those who don't know, this setting, AKA "YOLO mode", enables the agent to use its tools without asking for permission every step of the way. It changes your role from "LLM babysitter" to a pilot with auto-pilot on who can sit back and enjoy the flight.
Now VSCode will also repeat "Auto approved by setting chat.tools.global.autoApprove" after every tool use in the chat like a parrot that just won't shut the f up.