The setup is based on VSCodium that is a fully MIT build of Visual Studio Code. VSCodium project also disables telemetry and uses open-vsx.org as its extension market place. open-vsx.org is an Eclipse foundation supported project and it only hosts open source Visual Studio Code extensions.
In this setup, clangd is used as a replacement for closed sourced C/C++ Extension. That way the whole solution can remain fully open sourced.
To make clangd work (index code), compile_commands.json file needs to be generated. If your project uses CMake, then this file can be generated by setting -DCMAKE_EXPORT_COMPILE_COMMANDS=1. If you are only working on Linux kernel, you can use the gen_compile_commands.py (I haven't tried this, I just now it exists).
But to make it generic and to work with any project that can be build by devtool, I decide to use Bear. With Bear you can pass any build command and it will generate compile_commands.json file that is needed by clangd.