I'd love to see a real example/PoC.
Anyway, we discussed this issue in the other thread. For me, unrestricted outbound requests to any url, whether it's well known domains like api.github.com or any other domain, are a red flag.
Why does VS need to establish outbound requests to any domain, without authorization?
There's no magic solution, and these attacks will evolve, but I still think that restricting outbound requests is a good measure to mitigate these attacks.
> slurps up all of the users private keys/tokens/env-vars it can find and sends this off somewhere covertly.
Isolating applications can also mitigate the impact of these attacks. For example, you can restrict VS code to only share with the host .vscode/, .git/ and other directories. Even by project. Again, it's not bulletproof, but helps.