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It seems that VS Code 1.94+ is not compatible with extensions hosted in the code-marketplace. They all have this signature warning (Screenshot 1) which prevents them from being installed in the standard way i.e. blue Install button, or automatically if you’ve enabled auto updates. You can still install via the cog wheel if you proceed passed the warning (Screenshots 2 & 3).
VS Code added a simple format verification for the signature asset for extension, it has to be a zip file and contain a .signature.p7s (the content does not matter), the signature file returned from open-vsx fails this verification resulting in any extension failing to install.