Defaults matter. They matter even more given Microsoft's demonstrated history of quietly adding new telemetry and metrics which are enabled.

I have no skin in this particular game, but I'm glad to see the work being done.

Are you sure? This is what MS says about it:

Data Collection. 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.

https://code.visualstudio.com/license

You may need to wait for next week’s release. But it is made easy in the current insiders.