4. DATA. The software may collect information about you and your use of the software, and send that to Microsoft. Microsoft may use this information to provide services and improve our products and services. You may opt-out of many of these scenarios, but not all, as described in the product documentation. [...] Your use of the software operates as your consent to these practices.
Now, perhaps someone can find me the wording in any of the multiple directly and indirectly referenced privacy policies and other documentation that guarantees Microsoft won't upload and examine potentially sensitive data like my source code under those terms?
There is simply no way in which having to sign in to desktop software in order to do the same things you used to do without signing in is an improvement for the user. It is a security and privacy risk with absolutely no upside.
I'm concerned with whether I'm potentially disclosing trade secrets, violating NDAs or other contractual provisions, or simply risking a leak of my big new idea if someone else's system has a security breach.
As I wrote before, requiring a log-in and open-ended telemetry for a traditional desktop app is a vulnerability with no benefit as far as the user is concerned.