Due to this upcoming breaking change in Windows, it seems like VS Code is shown as an application which occasionally asks for Location:

We are seeing location access prompts being generated by this app due to a breaking change in Windows 2024 and want to be sure that this is expected, and that no fixes in the app need to be made.
Changes to API behavior for Wi-Fi access and location - Win32 apps | Microsoft Learn

Is VS Code calling either the Wi-Fi or Location APIs and has a use case for location? If not, this may result in end-user confusion.

As for rollout schedule:

• In a Windows Insider Preview release, the changes will first take effect in October 2023.
• You'll then have until the following Windows feature release in fall of 2024 to test your app's scenarios, and to make any necessary changes. After that date, Windows devices will begin getting the update that contains the behavior change described above.