But why can a theme make web requests?!

Because we live in a broken world and nothing matters.

On a more serious note, it's a pretty horrifying misfeature. What's even more worrying is that by all appearances Microsoft doesn't give a shit, if they apparently didn't even bother removing the malicious extensions that were reported. Not that I'm surprised, but still.

But why can a theme make web requests?!

To display ads on your ide

It's not a theme here, it's an extension.

They didn't put "AI" in the subject line of the emails, so Microsoft doesn't care...

Ah, the Microsoft tradition of always having the wrong priorities.

I wouldn't be too hard on Microsoft. The requirement to curate public package repositories only emerged somewhat recently, as demonstrated by the likes of npm, and putting in place a process to audit and pull out offending packages might not be straight-forward.

I think the main take on this is to learn the lesson that it is not safe to install random software you come across online. Is this lesson new, though?

I believe they're referring to lower down in the article, where the researchers analyzed existing extensions on the marketplace:

After the successful experiment, the researchers decided to dive into the threat landscape of the VSCode Marketplace, using a custom tool they developed named 'ExtensionTotal' to find high-risk extensions, unpack them, and scrutinize suspicious code snippets.

Through this process, they have found the following:

• 1,283 with known malicious code (229 million installs).
• 8,161 communicating with hardcoded IP addresses.
• 1,452 running unknown executables.
• 2,304 that are using another publisher's Github repo, indicating they are a copycat.

I wouldn't be so quick to write it off.

It's a proof of concept showing the weaknesses in Microsoft's vetting process for extensions published on the store. They then used the process to get pseudo-malicious code inside hundreds of organisations (not hundred of installs) some of which are high profile.

Their findings included an extension that opens an obvious reverse shell.

Thx for saving the click

Did you really have to use that stupid "fake news headline" phrase? Gross.

I remember seeing a lot about activeX controls as a kid but not understanding them much. As an adult reading this I was like "were they a way to run arbitrary code on a user's computer?"

Yes, they were a way to run arbitrary code on a user's computer.

Remembering ActiveX Controls, the Web’s Biggest Mistake:

Running JavaScript everywhere is looming as one of the biggest screwups in InfoSec. What do userscript extensions like Grease monkey teach us?

It sounds like it’s mostly typosquatting. So just check to be sure you didn’t install something like Pretier instead of Prettier

The researchers are releasing the scanning tool they created for people to be able to run against their own installs.

As far as I know, there is no such list (yet).

What should be done:
Escalate it to the people responsible for IT administration & security in your company or institution. They'll deal with it.

But the default step if you suspect of being infected is not to use the device at all until you got a green light for it from the security/admin folks. Power down, disconnect from any networks, either via physical cables or wireless, unplug external storage devices and wait for further info.

Or anything that downloads code from an untrusted source…