It's actually a bit different - VSCode has a 'front-end' process and a 'back-end' process (the extension host).
The extension host is larger than just handling language services - it handles additional functionality, like source control, menus, language configuration - the full protocol is defined here: https://github.com/microsoft/vscode/blob/master/src/vs/workb...
We aim to integrate with that back-end extension host process - in other words, to support the `vscode` extension API surface, not just language support.
Because of the ubiquity and popularity of VSCode - the extensions tend to have significant investment and be of very high-quality, so we'd like to be able to leverage that wholesale.
I suppose the vscode plugin support is implemented in similar fashion as coc[1] does it.
1: https://github.com/neoclide/coc.nvim