Downgrading to 5.15.9 fixes the problem completely.
Background transfer by default on with maximal transfer at a time at 9.
Open multiple files in WinSCP (I used 7) in VS Code to edit. Make an edit to each file then save all. WinSCP attempts to reupload files to host at least ONE of these errors pops up for each file reupload.
Server's host key is invalid
Signature from server's host key is invalid
Remote side unexpectedly closed network connection
Sometimes I even get host key fingerprint mismatch when clearly nothing has changed
Mashing OK on all those prompts makes the transfers go through correctly but it's annoying.