Though it WAS supported until very recently.

Some digging later:

Microsoft made it the default in mid-December.

The fix?
Don’t run your VS Code with Administrator privileges

The workaround?
Edit your settings.json file, which can be found in c:\users\<userid>\AppData\Roaming\Code\User to include this line:
"window.experimental.useSandbox": false

References:
Github – microsoft/vscode – Windows: fail to run as admin with sandbox enabled #169572

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