I 100% agree that the warning is displayed. But can't we not make that a bit more user-centric - to say, "You are going to remove all your files from your disk. This is IRREVERSIBLE."

Would that not be a better info/warning message to a user?

And if many IDEs delete files permanently, why can't VSCode start to do what's the right thing - move it to Trash/Recycle Bin.

Many startups (like Slack) didn't copy what all did, they did the right thing.