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In VS Code 1.57, I see this on the left of my status bar:

What is Restricted mode and how I can I remove this from my status bar?

Answers

Restricted mode means that you are currently working in an untrusted workspace ('restricted mode'). In 'restricted mode', some editor features (debugging, tasks, some extensions) are disabled to keep you safe when dealing with a project from an unknown source.

To disable the Restricted mode status bar entry:

1. Right click in the status bar
2. Uncheck the workspace trust entry

Note that this only hides the status bar entry, it does not change the trusted state of the workspace. This answer covers more details on workspace trust, how to trust a workspace (which also removes the status bar entry), and how to disable workspace trust entirely if needed

Even after disabling the Restricted Mode status bar entry, you can always trust the workspace with the Workspace: Manage Workspace Trust command