We collects telemetry data, from vscode extension which is used to help understand how to improve the extension. For example, this usage data helps to debug issues, such as slow start-up times, and to prioritize new features.
While we appreciate the insights this data provides, we also know that not everyone wants to send usage data and you can disable telemetry as described in disable telemetry reporting.
If you like to opt-out of telemetry collection you can disable idf.telemetry settings to false.
Settings can be located inside File > Preferences > Settings (macOS: Code > Preferences > Settings), there you can search idf.telemetry and deselect the option.
Please note change to this settings requires a restart of VSCode