This is Microsoft catching up to what JetBrains has had all along (in their paid products). There's DataGrip but I was also using all these features (minus the AI stuff) in IntelliJ Ultimate and PyCharm 5+ years ago.
The main difference is that JetBrains supports a bunch of databases, not just one.
Microsoft has had official Microsoft SQL Server, Azure Storage, CosmosDB and more extensions for VS Code for a long while now. The surprise is building an official branded Postgres extension rather than leaving that to all the (many) third party and/or open source extensions. I suppose it is a nice side-effect of "AI all the things" efforts that "GitHub Copilot support" was enough reason to grab resources for a postgres query editor and other tools.
(I thought it was particularly nice when you could install most to the VS Code DB extensions standalone as "Azure Data Studio"; you can build separate VS Code profiles for your coding and DBA hats of course, but it's not quite the same feel as launching a separate, dedicated application. Though "Azure Data Studio" was often overlooked because it worked just fine on non-Azure hosted databases.)