This article is a good example of how to write a misleading headline. They found 3 extensions, one of which has 45k downloads (because it name squats on a popular package), and another with 1000 installs.
The 45k dowload extension (Darcula Dark) collects some data that I would define as telemetry, and the python-vscode extension which is clearly trying to hide what it's doing. Now, whether you define telemetry as malicious or not may shape how you feel, but let's be honest, there's a world of difference between sending your OS versions to a telemetry server and injecting obfuscated code.
The 45k dowload extension (Darcula Dark) collects some data that I would define as telemetry, and the python-vscode extension which is clearly trying to hide what it's doing. Now, whether you define telemetry as malicious or not may shape how you feel, but let's be honest, there's a world of difference between sending your OS versions to a telemetry server and injecting obfuscated code.