Okay, sorry for the spam, but I managed to resolve this!
It appears that the underlying filesystem for the Store (reference: https://docs.microsoft.com/en-us/windows/msix/desktop/desktop-to-uwp-behind-the-scenes#file-system
) version of WinSCP became corrupt...
Simply go to C:\Users\%USERNAME%\AppData\Local\Packages\MartinPikryl.WinSCP_tvv458r3h9r5m\LocalCache\Local and delete the Programs
folder or the Microsoft VS Code
folder which is under it. Then everything should be working fine again.
I have no idea how this happened, but I am finally happy I got it resolved.