I'm advocating that Apache Foundation (or similar) oversee the direction of the project to ensure that equality is maintained
Let's be honest here: your problem actually lies with Microsoft getting it's money's worth by paying their people to do their work. That's what's bothering you. MS started the project, paid everyone's salaries, managed the project, and once it started delivering arguably the best editor around... Now you want to push it out? Why?
If you really care about what you're advocating then just click on "fork" and be the change you want to see in the world. Then let us know what came out of it.
But, I also understand that "well, you could just fork it" doesn't fix the problem the author brings up. Who owns the marketplace around VSCode? Who controls what is allowed in? What if MSFT decided to not allow GitLab extensions, or AWS extensions to further its own products? MSFT _has_ done these things in the past.
I'm just saying that handing the governorship of the project to an independent organization would address these issues. MSFT could still build and contribute to it, but the project direction, the telemetry, the ecosystem, could be managed by an independent agency, and that would solve the issues the OP has with the product.
Vscode is already licensed under the MIT license.
There are already FLOSS forks of vscode, such as vscodium.
The solution you're advocating is not a solution at all. In practice you're just advocating that MS should stop investing the company's resources to develope the product, because orgs such as the Apache Foundation are already free to fork the project and work on it themselves.