Tiktok takes into account much more than that. Have you looked at the app permissions? Location, sex, age, device info, data from 3rd parties, camera, microphone, clipboard, contacts... And that's just off the top of my head. Hiding that fact makes it very convenient because I sure as hell would not voluntarily give all that data (and more) to anyone.
It's not only VSCode, it's also Github and C# and TypeScript to a lesser extent as well, probably. They want to have control over the "coding" ecosystem. And look at what they already did with github, they trained AI on all projects on it, and they then sell access to that AI.
Before you all fall for the shamless clickbait, no, they haven't yet.