The language server is part of the SDK itself. The language server integration, debugger and all the features that make VS Code a good tool to write C# in are a part of base C# extension which is MIT-licensed and has no commercial restrictions whatsoever.
The only "wart" is that "vsdbg" - debugger it ships with is closed-source because it is essentially the same debugger as in Visual Studio but extracted into a standalone cross-platform component. There is an open alternative "NetCoreDbg" used by the extension fork for VSCodium (and various DAP bridges to Neovim, Emacs, etc.).
The language server is part of the SDK itself. The language server integration, debugger and all the features that make VS Code a good tool to write C# in are a part of base C# extension which is MIT-licensed and has no commercial restrictions whatsoever.
The only "wart" is that "vsdbg" - debugger it ships with is closed-source because it is essentially the same debugger as in Visual Studio but extracted into a standalone cross-platform component. There is an open alternative "NetCoreDbg" used by the extension fork for VSCodium (and various DAP bridges to Neovim, Emacs, etc.).