This feature is still in a (very early!) Alpha status. Here's what that means!
Since our implementation is still in the early stages, there are a number of limitations:
Extensions must be installed on a per-sandbox basis.
Settings must be set on a per-sandbox basis.
You can only have up to 250MB of extensions installed.
The loading of VS Code may fail occasionally (refresh the page if so).
There may be bugs in the actual VS Code interface.
Not all extensions are available for installation.
VS Code projects take about 15 seconds to load vs 2 seconds for a normal sandbox.
Some menu options may not make sense, for example there are mentions of "OSX" and "Windows", and "Ctrl+N" will actually open a new browser window, not a new file.
Your extensions in a sandbox will need to be reinstalled.
Your settings will need to be reconfigured.
The interface is going to change significantly.
Any code you write in a VS Code sandbox will be persisted as it would in a normal sandbox.