What does VSCode send back to MS?

I've noticed lots of people here use VSCode and before I give it a go I was wondering what it does behind the scenes. Microsoft has never been shy about admitting it scans content loaded on its servers so I've always avoided them whenever possible. They also claim they only send "diagnostic" data back to MS from their applications. Well, the term "diagnostic" gives them a lot of wiggle room. Something the user might never notice might classify as unusual and require your entire library of source code in order to diagnose the "bug" that was discovered behind your back.

Anybody ever done any monitoring of VSCode to see just what it is sending home?

Paranoid? You bet!

That doesn't quite answer your question but you can disable all this by searching for "telemetry" in the settings and disabling the option. In my case, there's one for VSCode, and one for Redhat somehow.

In Little Snitch, I see there was still a request to msecnd.net but I believe this is for update checks.

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You can turn telemetry off in VSCode but I think it first sends some stuff back on first install and then again to tell Microsoft you disabled telemetry.

If you want to use VSCode but don't like the telemetry then you can use VSCodium which is the project that creates open source binaries from the "Code OSS" repos and in the process removes telemetry. Worth noting that the final packaged "VSCode" binaries are not open source which builds binaries from the VSCode source that Microsoft has made available.
Some extensions, even the ones published to the OpenVSX registry, also "phone home" to Microsoft so even with VSCodium you can't be certain.

Otherwise there are plenty of alternatives (for text/code editing at least - not sure of other editors that have Joplin integration like @rxliuli's Joplin plugin, although Neovim has Jopvim).

Actually the other project I've been working on is a community driven fork of the Atom editor called Pulsar which started when Microsoft decided to sunset Atom in favour of VSCode. The first thing we did was actually to strip all of the telemetry out of it, the only thing we keep track of now is if a package is installed or starred so we can maintain our package registry (of course even that can be avoided if you installed package manually).