There is a Feature request from 2018 that I have been following for a long time to ask for VSCode Sadbox. I do not understand how Microsoft is not putting it up in priority. https://github.com/microsoft/vscode/issues/52116
Sandbox alone isn't sufficient because when loading a malicious extension into a session you might be exposing your environment variables to it. You also need explicit permissions, so that only relevant extensions can access secrets like this. And even if this exists, and you are sandboxed, with all guardrails and such, if you trust an extension that later gets compromised, you'd get the same sadness. It's the proble…
This is how browsers have been doing things for 20 years, it's ridiculous that a company worth billions isn't doing it.