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> Instead of sending streams of bytes to render text, it sends streams of encoded X Windows commands to draw the UI.
(Simplified) VSCode is sending no bytes to a server when you're editing a file. The entire file exists on the client, you can edit all you want and everything stays on the client. Only when you pick "save" is a data sent to the server.
My understanding with X Windows is as you mentioned above, you press a key, that key it sent app on another machine, that other machine sends back rendering commands. Correct? Vs VSCode, you press a key, nothing is sent remotely
Note: There's more to VSCode, while it doesn't have to send keystrokes and it is effectively editing the file locally (so fast). It does send changes asynchronously to the remote machine to run things like the Language Server Protocol stuff and asychronously sending the results back. But, you don't have to wait for that info to continue to edit.