I met the same bug in Edge. https://issues.chromium.org/issues/40239916
If you need a workaround, change the default pointer in Windows settings (Start -> mouse pointer size -> enter),
either make it bigger, or make it black. Or turn off GPU acceleration.
1. Open command pallete (Ctrl + Shift + P)
2. Enter "Preferences: Configure Runtime Arguments"
3. Add config: "disable-hardware-acceleration": true
4. Restart VS Code
Source: microsoft/vscode#205491 (comment)
Author: galchinsky