VS Code is not a replacement for an IDE. While I only know IntelliJ, I assume VS must be similar. In short, VS Code is a replacement for Notepad, and not for an IDE. It's not as well integrated, not as thought-out and capable. The only thing that saves it IMO is the remote server mode.
VS is my daily driver and I absolutely agree that VS Code doesn’t come anywhere close to a fully fledged IDE like VS.
But VS Code is far more just a text editor and that you can run and debug many languages in it in my opinion means it meets the criteria of an IDE.
If I was forced to switch from VS to VS Code I would be miserable and feel handicapped, but infinitely more productive than just having a text editor and the dotnet CLI.
So VS Code is absolutely a “replacement” for VS, but only for a poor man with a very limited set of required features.
All the above being said, I don’t ever see VS Code truly replacing VS, but it’s a competent IDE considering its both cross platform and free as in beer.