I can't currently use VS Code with extensions to check, but you should be able to uninstall or disable Copilot and MCP. When I search for MCP in the settings, I see several settings, some of which can restrict MCP use/start.
Alternatively, maybe you want to try a VSCode fork, like Codium (dunno if they only drop telemetry or some of the Copilot stuff as well now), or an alternative similar IDE, like Geany.