I was able to run it, but only after snap run --shell vscode and going through the wrapper scripts to find the proper binary. The actual vscode binary is $SNAP/usr/share/code/code and it works if you start it from snap shell.
The problem is in $SNAP/bin/electron-launch helper (called by $SNAP/command-vscode.wrapper) which sets up LD_LIBRARY_PATH so that it picks up $SNAPusr/lib/x86_64-linux-gnu/libgio-2.0.so.0, and that glib version is linked against libselinux.so.1.