For sure legal. Technically, it's extremely simple to change the Marketplace in VS Codium, but it is against the ToS of Microsoft's Marketplace to change it to theirs (see https://github.com/microsoft/vscode/issues/31168#issuecommen... for more details). As the linked comment also states, this is a big part of the reason why Open VSX was created and is widely used by VS Code forks.

Why would this be an issue? The code itself can't agree to the ToS, so only people using it could possibly do so, and depending on how the connection is set up, they might be able to skip agreeing to the ToS since that's just a client-side construction in MS VS (I hope).

So then the user can make the change, and then it's the user's ToS violation.

If the publisher makes this change in public then it's their ToS violation with receipts. I don't think you're really arguing that the VSCodium folks should make this change in violation of the ToS, sign it, and package it up...

They have built this whole alternative ecosystem so they can be in compliance.