If you open any folder with vscode, and you have this extension installed, it would create instantly a .vscode folder for it to works. There's no setting for changing it behavior. Less intrusive would be to store hiden files paths or patterns instead in the global vscode .settings or a global .json in the extension folder.
#6 could be solved by storing the hiden files path in a global .json, and subsequently #5 could be too, making use of the deactivate function