Julia and Julia Extension for vscode are two very separate things with different version numbers. Julia is the programming language and can be used with any editor of your choice (or even directly from the terminal). Your Julia version is 1.5.3, but you may have other versions installed as well.
The Julia Extension for vscode is an extension primarily built with typescript (I think) and interfaces with the features provided in vscode. It’s got functionality for launching code, showing inline results, showing plots, providing a debugging toolchain, linting, and overall interacting with the julia REPL. The current version of this extension is 1.0.12 (you have 1.0.10 which is fairly new as well but you can update if you want). So everything seems fine to me.
I don’t understand though why your Julia REPL in vscode defaults to some 1.0 version. This is likely because you’ve told the extension to look for Julia in a particular location and thus overwriting the mechanism that uses the $PATH variable. Can you show your JSON settings file? And make sure your executable path is left blank?