VSCode has telemetry, the extension market place can't be used by non-microsoft products, VSCode is not open source (only VSCodium is), many of the MS extension are not open source (like live collaboration), etc.

VSCode followed the classic big tech recipe : 1) make it open source to look like the good guys & get adoption and contributions 2) close-source many key components & add spyware.

Story of Android too pretty much