The VSCode binary available on the official website IS NOT FREE SOFTWARE ("free" as in "freedom"). The binary there is under a proprietary license. VSCode's source code is under the MIT license, but the MIT license allows binaries to be redistributed under a proprietary license.
Free distributions of VSCode exist, namely Code OSS and VSCodium. However, Code OSS ships the default VSCode configuration, meaning it comes with telemetry enabled and SENDS USAGE DATA TO MICROSOFT. VSCodium comes with telemetry disabled. Therefore, I recommend using VSCodium.
With that in mind, whatever VSCode distribution you choose, the most important setting in this guide is:
"telemetry.telemetryLevel": "off"