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The author offers no evidence for said "trouble" other than the existance of a similar free offering at github. Clickbait.
Agree, he also mentioned that gitpod is slow as compared to github.

While I agree there are several other factors which play a part in which company is going to win, the L team at gitpod will be definitely be alarmed.

I found that gitpod is much quicker than github for android dev.
How an opensource project is in a big trouble because it have close source alternative ? It's the other way around. As soon as close source alternative aren't as customizable as opensource ones they will come looking opensource alternative and how it grows.
Distribution. GitHub Codespaces will pop up everywhere on GitHub. The experience will be seamless. It’s like Slack vs MS Teams. Yeah Slack is doing fine. But MS Teams is winning in terms of users.
MS Teams is not winning the users; it is rather winning IT managers since it seems to be cheap/free. It is among the worst piece of software I ever had to use. It's laggy as hell, and nothing is presented in a logical way.
Microsoft is in full Embrace, Extend, Extinguish mode.

This includes: tie ins in VS Code not available to third party extensions; closed source Python and C# features not available to third party forks of VS Code; features like Live Share and ML powered completions; and Gitpod can't use VS Code without forking it or violating the trademark.

It's not about opensource vs closesource, it's about free *service* based on opensouce vs free *service* based on closesource.
I found that gitpod compiles are quick compared to github or gitlab. For free gitpod gives 8 cores + 16GB RAM. Better than my local device.

Wondering what the long term strategy of gitpod.

Uh, what the hell is that cursor follow circle thing? https://cs.joshstrange.com/e5RKH0

It's like if someone said "Can we come up with something worse/more annoying than overriding scroll behavior?"

I couldn't read the article, that cursor thing was way too distracting. Also I have a hard time taking someone seriously who would add that to their website.

Don’t worry, you didn’t miss anything. The article is trash. Completely irrelevant.