A group of Israeli researchers explored the security of the Visual Studio Code marketplace and managed to "infect" over 100 organizations by trojanizing a copy of the popular 'Dracula Official theme to include risky code. Further research into the VSCode Marketplace found thousands of extensions with millions of installs.
I believe they’re referring to lower down in the article, where the researchers analyzed existing extensions on the marketplace:
If you look at the code of one of the “malicious code”, it hit a … local IP, not a remote one.
Does that mean the hacker is in my room??