Given that a locally running VS Code can interact with the host system, and a webpage cannot, I'm sure there will be some differences between the two.

And like you said, the exception in features could be extensions. If that's the case, it's not "the full Visual Studio Code experience".

(Not to take away from their announcement, it's very interesting and I've joined the wait list, just this type of absolute wording irks me).

Well, the web app is interacting with a host system too — the host just happens to be different than your web browser environment.

I mean, yes, there are some differences between the two (and keep in mind you can also access a Codespace via a locally installed copy of VS Code in a remote development environment, where the remote dev environment is the Codespace VM), but as far as I know, there are very few differences between how a remote environment locally works vs a remote environment using the browser-hosted editor.

You’re correct when you say there are differences, but I still feel like “full” experience is accurate. Full doesn’t have to mean 1:1 copy. To me it just means aren’t losing out on something.

I work at Microsoft on Azure but not on VS Codespaces or GH Codespaces. I’m just a fan/user of both.

Not having extensions alone already means it's not the full experience. How many people run vanilla VS Code?

Can I run unit tests? Debug?

It does have extensions[1]. It just might not be able to run _all_ extensions.

[1] From the link: "Inside of a codespace, you’ll have access to the Visual Studio Code Marketplace, and you can preload any extensions you want loaded at launch using a devcontainer configuration file. You can also personalize your codespace by pulling in dotfiles."

The article notes near the top that extensions are supported, and also answers your other questions.

Are extensions not allowed?