Surely VS Code terminal pane can't display arbitrary unix terminal session, so this shouldn't be a concern. Arguably windows makes it easier: since color control is out of band, it can be ignored and only text is displayed.
because of the hacker community circle jerk. there was no rational reason. it's like back when people used ANSI.SYS to display a text file with colors. it's leet factor and has no application in reality.