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In VSCode cursor is hidden by vertical "collapsing" lines
That issue become major turn over for me, it's really annoying, and I wonder why no one had discovered it yet.
Please take a look on the gif I have recorded:
Yes, you can tell that cursor is still flashing (if your eyes are decently sharp), and there is a subtle difference in row highlighting. But you have to agree, you would need to pay significant amount of attention to find that cursor once it's lost in huge file. Or if you would get distracted. OR! If it's first position in the line and your cursor movements are moving cursor to other lines, which are also affected by the issue.
I know this is not a solution but you can set the cursor of VS Code to be a block. Then it's much easier to fin where it is and you don't have this problem.
It looks like this:
If you go to File -> Preferences -> Settings and look for "Cursor" under "Text Editor" there you can find the attribute Cursor Style: you can select block there.