The problem is not companies doing this but users and developers not caring or sharing your concerns. All this moralism about ethos and such is just not that re

The problem is not companies doing this but users and developers not caring or sharing your concerns. All this moralism about ethos and such is just not that relevant. What matters is that software licenses are legal text documents. The only place where the interpretation of those texts matters is in a court room. I don't think there are a lot of court cases involving VS Code. MS tends to have their house in order on that front. So, VS Code seems safe enough in the legal sense. Yes, it has some extensions that are not licensed as OSS or that are simply closed source. So what? If that bothers you, don't use those. Or better, fix it by creating some open source. Open source is not a right, it's a privilege that is granted to you at the discretion of the creators of that software. Not something that you can demand from them. VS Code is a closed source product that includes lots of OSS components. So much that there's VS Codium a well, which is fully OSS. A lot of those OSS components are used in other products as well. And some of those things are fully open source. The value of the VS code ecosystem is that it enables this ecosystem of components and products to thrive.