It's all about the "little things". It's basically Sublime, except some core features like git integration (brought by gitguttter plugin in sublime), debugger gui, integrated terminals are baked in and "just work the way you'd expect" with the default settings.

Then there's the fact that the settings are either self-documenting or well documented online, so much easier to customize without spending time learning how to do it: just start editing the settings (btw, Sublime "stole" the 2-pane default/user settings ui idea from vsc) and figure out what does what as you go.

And then there's the fact that plugins seem to "just work" and "out of the box". With Sublime plugins I often had the "ok, I installed it, AND the other 3 things it needs to do it's job too, now how do I freaking use this poc?!" often followed by the keybindings being "wtf, this conflicts with everything else, no I have to think what my custom ones to be" etc. The whole "don't make me think", "don't waste my time" and "just works out of the box as expected" philosophy, adopted by most plugins too, and coupled with being just fast enough.

But yeah, with default settings VSC is annoying and looks bloated, but if you hide most of its UI and setup vim mode keybindings it feels like a superpowered vim :) Microsoft tends to be very good at "the little things" and at "discoverable UIs"... I still like Windows' UI most despite only occasionally using it nowadays for example: beyond the top layer of "monkey shit" (that you may need to hide/disable/reconfigure etc.) is a nicely configurable UI that caters well to power users.