If you're using an Intel Mac at this point, you should 100% upgrade. The performance of the MX chips blows away the Intel chips and there's almost no friction with the arm architecture at this point.
I don't use VSCode but most of my team do and I frequently pair with them. Never noticed it to be anything other than very snappy. They all have M1s or up (I am the author of this post, so the detail about their hardware is in the link).
I work on a team that does BYO devices. Some have arm/mac, but most are on amd64/other. This forced us to make our development environment cross arch, even though our production environment is amd64/Linux only.
Some challenges included Docker images being arch specific, old Terraform modules lacking ARM support (forcing an upgrade we'd otherwise defer), and reduction in tooling we'd consider for production. We generally worry about arch specific bugs, although I don't believe we've seen any (other than complete failure to run certain tools).
Kind of a edge case, but we were attempting to migrate from Docker to Podman, and found running x86 container images in Podman Desktop on M-series Macs to be unacceptably slow. Docker Desktop supports Rosetta 2 virtualization which performs fine, but Podman Desktop does not.
I don't use VSCode but most of my team do and I frequently pair with them. Never noticed it to be anything other than very snappy. They all have M1s or up (I am the author of this post, so the detail about their hardware is in the link).