it's worse than that, last i looked into this - there's functionality in the protocol that allows the remote system to modify files and execute code on the local/frontend system. it really is bananas.

Edit: there's a security note (still) on the remote ssh extension page:

Security Note Using Remote-SSH opens a connection between your local machine and the remote. Only use Remote-SSH to connect to secure remote machines that you trust and that are owned by a party whom you trust. A compromised remote could use the VS Code Remote connection to execute code on your local machine.

https://marketplace.visualstudio.com/items?itemName=ms-vscod...

Shock and horror!