Here are some examples:

- ESLint, the most commonly used linter in the JavaScript ecosystem uses a JavaScript file for configuration (eslint.config.mjs), so if you open a JS project and want your editor to show you warnings from the linter, an extension needs to run that JS

- In Elixir, project configuration is written in code (mix.exs), so if you open an Elixir project and want the language server to provide you with hints (errors, warnings and such), the language server needs to execute that code to get the project configuration. More generally it will probably want to expand macros in the project, which is also code execution.

- For many languages in general, in order to analyze code, editor extensions need to build the project, and this often results in code execution (like through macros or build scripts like build.rs, which I believe rust-analyzer executes)

When you open up a folder in VS code, addons can start to set up language servers to index the code in the folder. This usually involves invoking build systems to set those up.

(I think some people are fixating on the specific feature that's mentioned in the article. The reason this pop-up exists is that there are many ways that this code execution could happen. Disabling this one feature doesn't make it safe, and this feature if not present, could still be achieved by abusing other capabilities that exist in the vs code ecosystem)

Makefiles etc. Many types of projects use arbitrary setup and build commands or can load arbitrary plugins, and unlike VS which imposes its own project format, VSC tries to be compatible with everything that people already use. Git hooks are another one.

Programming projects frequently feature scripts for building and packaging said projects, those have to be run somehow.

Bundling running those into the editor seems like the mad part to me, but I've missed the whole VSCode train so probably something I'm missing.