Hyperbole kills the meaning of words, to the point that people stop taking them seriously. You're doing a disservice to "malware" here. Yes, VSCode wants to know everything you do in that app, but it's not like it will keylog everything you do and steal your credit card.
That's no hyperbole. Do you know what a malware is? If you do, you know that a text editor that collects telemetry is a type of malware, period. There is no meaning discussing if they are logging every thing but if they can. If they can, it is a malware. They can.