Eh, it's the Visual Studio Code repository.

That's perfectly fine. (there's also Wolfram Mathematica on Raspbian images for example too, it doesn't have a goal to be explicitly made of OSS at all)

And the server images are just the client ones with less packages installed, but the same repositories.

The question is why it's installed by default?

Also why would the admin in Raspberry Pi forum remove threads related above issue.

It's suspicious.

Because Raspbian is made for mainly educational purposes, and VS Code is the most user-friendly text editor, so they are shipping it. The lite image uses the same patches/base the full educational image uses, so the repo was also installed there.

If you plan to run it as a server, you should probably pick another distro or live with that fact.

The forum threads were closed because they were duplicates.

Not fine. This damn' repo just appeared on my Pi's at the end of January it seems. No warning. No knowledge of what it is.

I don't really understand how this is an issue. The raspberry pi/raspian distro is made primarily for education, so making it easier to install VSCode which is a popular tool (and also one of the recommended tools for developing for the new Raspberry Pi Pico) is a good thing. It's not like VSCode is being forcibly installed on all raspberry pi's, just because the repo is in the source lists doesn't mean you have to install anything from it.

Regarding #2...Aren't most ISPs based on dynamic IPs which are leased? I don't understand the risk of our digital footprint being leaked here, much less its severity.

Unless you’re frequently powering down your equipment you’ll likely keep the same IP. DHCP will try and keep the same address to avoid impacting in-flight connections, etc