Hey forum, long time member/lurker, logged in just to add my $0.02 USD
The Visual Studio Code binary from Microsoft is proprietary. It uses the MIT-licensed source code available at https://github.com/Microsoft/vscode as its base, however it contains changes that are not distributed.
There is a Free build in Flathub which is also compiled from the MIT-licensed code and is released under a free license (GNU Affero General Public License v3). This free build is available here: https://github.com/flathub/com.visualstudio.code.oss
This free version is also published in Flathub: https://flathub.org/apps/details/com.visualstudio.code.oss That one should be preferable, however, I don't know what is the situation regarding plugins, if it does anything to prevent the installation of non-free plugins, or if it allows plugins at all.
