I appreciate the effort you put into developing this. However, I'm honestly shocked you received only positive reactions. I booted up my system today and found that it made terminal nearly unusable. The old tab-complete behavior gets you to the branch point you want fast, minimizing typing time. The new behavior quickly shoots past the relevant branch point, meaning I spend considerable effort going back to edit commands.
Also, speaking as an educator, I think there might be a misunderstanding about what makes things intimidating for new users. Systems that make specific decisions without being able to easily control them makes things more intimidating, not less. And if I'm reading your post correctly, it sounds like you are trying to introduce a feature on newcomers, but your internal testing was done on insiders and stable users -- a different population.
Frankly, at this point I may strongly discourage all of my students from using VSCode.