VS Code has enough momentum by now that Microsoft couldn't kill it even if it wanted to. And a lot of the arduino-side work would involve creating/tweaking LSPs to their ideosyncrasies and making IDE-agnostic compilers... all of which is IDE agnostic and makes Arduino more useful to all users.

And, worst case, they could take it all to IntelliJ or other IDE vendors and quickly spin out an Arduino-branded IDE that isn't raw sewage.

VSCodium is a de-microsoft'd version available. Still missing some of the features that aren't licensed the same.