It's a simple thing and I was pretty sure it's well described, but surprisingly it is not so obvious.
Here I've found a detailed description of settings file. As it states it should be setting.json file located %APPDATA%\Code\User\settings.json, but in my case it's not there.
Can someone give me some help with restoring default settings in Visual Studio Code? I've hidden menu bar by accident and I can't find no way to show it back.
This may be overkill, but it seemed to work for me (on a Mac):
#!/bin/sh
rm -rfv "$HOME/.vscode"
rm -rfv "$HOME/Library/Application Support/Code"
rm -rfv "$HOME/Library/Caches/com.microsoft.VSCode"
rm -rfv "$HOME/Library/Saved Application State/com.microsoft.VSCode.savedState"
After I ran that, and restarted VSC, it showed the the "Welcome" screen, which I took to mean that it was starting from scratch.
If you want to start afresh, deleting the settings.json file from your user's profile will do the trick.
But if you don't want to reset everything, it is still possible through settings menu.
You can search for the setting that you want to revert back using search box.
You will see some settings with the left blue line, it means you've modified that one.
If you take your cursor to that setting, a gear button will appear. You can click this to restore that setting.
You can also use the drop-down below that setting and change it to default.
On Linux environment delete the folder "~/.config/Code" to reset Visual Studio Code Settings.
Press 'Windows-Key"+R , and enter %APPDATA%\Code\User
And delete 'setting.json' at this location.
Press 'Windows-Key"+R , and enter %USERPROFILE%\.vscode\extensions
And delete all the extensions there.
After two vote downs added images to make it more clear :)
Menu Bar. Click on File->Preferences->Settings 
Settings tab, click on the 3 dots button ...->Show Modified Settings 
You can reset both the user and workspace settings in VS Code as shown in the following screenshots
Go to File -> preferences -> settings.
On the right panel you will see all customized user settings so you can remove the ones you want to reset. On doing so the default settings mentioned in left pane will become active instantly.
The best easiest way I found to reset settings:
Open Settings page (Ctrl+Shift+P):
Go onto your desire setting section to reset, click on icon and then Reset Setting :
If all you want to do is "reset perspective" ala Eclipse (and why is this not in Code anyway?) then select [View] -> [Open View] -> [Run and Debug].
This puts all the panes back, this is what most people mean by "reset perspective".
If you just need to reset your profile for a quick test, VSCode 1.71 (Aug. 2022) will propose:
transient profiles
These profiles are deleted automatically once the last window which uses it is closed.
You can create and associate a transient profile from
CLI by passing
--profile-transientflag. Eg:code <folder-uri> --profile-transientUI from Command Palette using command
Create Transient Settings ProfileThese will create a transient settings profile and associate it to the workspace.
Once the workspace is closed (or uses different profile) this profile is deleted.
That can help before going nuclear and deleting your current profile and VSCode settings.
This is released to VSCode Insiders today.
Heads up, if clearing the settings doesn't fix your issue you may need to uninstall the extensions as well.