You're mad because your Raspberry Pi offers you the possibility to install a piece of software you have no interest in? Microsoft can't track you if you just simply... don't install vscode. It's that simple.
The difference is that you usually add the specific repos only when you need them. This one is configured and enabled out of the box, by default, for everyone.
I wonder... why so many people on this topic miss the nuances and suggest going into extremes?
Really? Slackware came with proprietary repos enabled by default? (I don't remember; I had slackware on floppies).
Even Ubuntu didn't do that; their partners repo is off by default, if you want it, you can enable it. Fedora has similar mechanism, where it asks you when you first time run the Gnome Software.
Not really true. As the GP wrote:
> It pings MS every time an update occurs
is exactly true. You will ping Microsoft every single time you run 'apt update', even if you have nothing installed from this repo.
Ideally, the repo should be disabled by default.