I can't reply to your deepest comments, so.

When you give the agent access to the machine you're using a set of assumptions that may or may not be true. Now, if you watch every single thing, maybe everything will be fine. Or you'll catch it running a priv escalation and setting itself up as root and trying to move laterally by any number of means and methods.

The agent isn't a living thing and the only way you can punish it is by not using it again if it does wrong. Hence it doesn't have reservations about doing bad things.

I agree with all of that. Could an agent go rogue by ssh session and do something like quickly write and execute a piece of obfuscated bash that retrieves a payload I was previously unaware of and executes it? Yeah. Have I seen one of my agents do that yet? No, but I remain skeptical and know that such a thing could happen, theoretically. The VSCode agent in question seems to be designed from the outset to do this as an intentional feature, the part I am highly skeptical about is that it may not be informing its users of the full possible ramifications of what it installs by default.