People still use our old-fashioned Unix login servers

Running a remote VScode backend on those while it is technically using the traditional shared server feels like that is not for the "shared" part but just because it is free and available?

Free and available is always good (especially in a research environment). ;) The author also says this in the P.S.:

"I believe the reason people run IDE backends on our login servers is because they have their code on our fileservers, in their (NFS-mounted) home directories. And in turn I suspect people put the code there partly because they're going to run the code on either or both of our SLURM cluster or the general compute servers."

Wonder why they dont use git. Maybe a lot of that isn't committed but is large data files?

that’s orthogonal, right? they may or may not be using Git regardless of where the files are

I mean rather than work off a remote machine for the convenience of having files you can deploy to a compute cluster use git (or maybe scp) to work local and then deploy them when needed. For a lower latency editing experience.