I don't understand the fuzz about it. There are a lot of commercial/closed-source devtools out there (IntelliJ, Rider) for otherwise open languages/platforms that devs are obviously happy to use and pay for. We are not demanding that every Java/Python/PHP etc. tool is open source and free, why is there this double-standard for Microsoft?
Because Microsoft claims they love open source, apparently they are not allowed to do anything closed source, ever.
People get angry when suffocate existing tools with their free and "open source looking" alternatives. Ask Python devs if they think that their VSCode extension is open ... Even I thought it was open yesterday, turns out it's not and they pretty much removed support Jedi, the acutally open language server.