[oaiey]

Just that the out-of-the box Open Source VS Code is modified by roughly 5 configuration options (you guessed, telemetry urls), icons and a EULA before it is packaged by Microsoft.

I would not call that closed source. I call that redistributed with pre-configured settings. It is similar to what RedHat is doing to Linux and the GNU user space (if I am not wrong ;))

However, the extension market space, certain debuggers and certain VS Code branded extensions are a different story.