When you open the extension for the first time, the extension asks you whether you give consent to provide telemetry data.
Accepting the telemetry request provides Nordic Semiconductor with information about how the extension is used, how it is performing, and where improvements need to be made.
You can check what type of data is sent and when it is sent by running the Visual Studio Code's --telemetry event flag.
After you accept or decline the telemetry request, the telemetry notification does not appear again.
To change the telemetry settings, use the nRF Connect's nrf-connect.enableTelemetry setting.