I think they are exactly seeing this and acting on it. IMHO they will start offering on VS Code a basic free product (a stable omnisharp equivalent) good enough

I think they are exactly seeing this and acting on it. IMHO they will start offering on VS Code a basic free product (a stable omnisharp equivalent) good enough for coding, debugging, etc. and then pricy options like visual designers, intellitrace, AI-guided coding, hot reload, etc. IMHO they will do the same for Python, PHP and others. They head of the dev division needs to protect the revenue. Simple as that. However, I completely agree with your sentiment: "Microsoft doesn't see what's good for them" ... because "free" is not "open source" and trust does not come from "free" but from "open source".