Therefore, you generate a “clean” build, without the Microsoft customizations, which is by default licensed under the MIT license When you clone and build from the vscode repo, none of these endpoints are configured in the default product.json. We clone the vscode repository, we lay down a customized product.json that has Microsoft specific functionality (telemetry, gallery, logo, etc.), and then produce a build that we release under our license. When we build Visual Studio Code, we do exactly this.
According to this comment from a Visual Studio Code maintainer:
Microsoft’s vscode source code is open source (MIT-licensed), but the product available for download (Visual Studio Code) is licensed under this not-FLOSS license and contains telemetry/tracking.
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