So glad this exists. It took people quite some time to group up for this.
I find it... borderline immoral to have an open source product and then have binaries contain telemetry and other stuff that's not in the main tree.
But, hey, we couldn't expect Microsoft not to muddy the waters a bit.
The model Microsoft is following here is called the "open core" model, where the core part of a product is open source, and then some extensions to it are proprietary. It's the same model that Chrome itself, that VSCodium is built upon, operates with. And also Android.
It's their choice fundamentally. They pay for all the VS code developers, so from a moral standpoint, they don't have to release source code at all (outside of general immorality of proprietary software but that's something different). They still decide to release it and IMO they should be lauded for open sourcing at least parts, and enabling DFSG-compatible rebuilds to exist.
I interviewed with the VSCode team at Microsoft Zürich (didn't get the job because there were more senior candidates that already contributed to the open source repo, fair game). I have to say I'm super impressed that a small team in Switzerland managed to build and maintain it! Coming from that point of view it's imo totally okay that there are some proprietary parts. If it doesn't generate revenue in one way or another, we wouldn't have it. FOSS is cool and all but someone has to pay the devs eventually.