In Jupyter classic and lab, the list of kernels presented to run within represent those runtimes that are registered with kernelspec.json files as well as one special/default "Python3 (ipykernel)". When a user chooses this last one, the kernel used represents whatever the active Python environment was when Jupyter was instantiated.

In VS Code, most users don't start it from an active Python environment. Therefore, the above behavior isn't possible. Instead we currently show the list of custom kernels registered by the user (ala kernelspec.json files), in addition to every other Python environment the Python extension can find on the system.

This can be highly confusing to a user who may have been working with Jupyter classic or Lab using the default kernel. When they open it in VS Code and have to choose a kernel they'll be presented with a long list of possibilities. This can be startling and confusing, even IF it makes technical sense.