According to the “why does this exist” section of the readme:
When we [Microsoft] build Visual Studio Code, we do exactly this. 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 you clone and build from the vscode repo, none of these endpoints are configured in the default product.json. Therefore, you generate a “clean” build, without the Microsoft customizations, which is by default licensed under the MIT license.
This repo exists so that you don’t have to download+build from source. The build scripts in this repo clone Microsoft’s vscode repo, run the build commands, and upload the resulting binaries to GitHub releases. These binaries are licensed under the MIT license. Telemetry is disabled.
The Visual Studio Code license referenced is a short read. You should read it if you use VS Code.