The problem extends far beyond VS code. All extensions and executable code has the same problem. There was a case where Disney was hacked because an employee installed a BeamNG mod that had bundled malware.
A company that wants to remain secure would have to employ strict restrictions on installing software. Only installing npm packages and plugins from an internal preapproved repo for example.
A company that wants to remain secure would have to employ strict restrictions on installing software. Only installing npm packages and plugins from an internal preapproved repo for example.