Stefan, it sounds like you could benefit from using the server-side editing capabilities of this extension, in combination with server-side source control such as Deltanji from George James Software (for whom I work). Properly implemented, server-side source control will also control people who edit using Portal and Studio, or who use our Serenji extension for VS Code instead of the InterSystems one.

That setting affects how the ObjectScript Explorer behaves. That's the tree you get if there's an InterSystems logo on your Activity Bar and you click on it. It's the tree whose primary purpose is to let you export server code into files on your workstation that you then edit locally, probably add to a Git repo, and import to your server to run and debug it.

When you select a class or routine in that tree, and it only exists on the server (i.e. it isn't one that you have already exported locally), then the above setting dictates whether the code is opened read-only or editable.

If you set up a server-side-editing workspace accessing a namespace for which your class is the source control class, you should see these buttons at the top of an open class or routine:

Also these entries on the document's context menu:

Each will open a quickpick top-centre of your window. The "Server Source Control..." one will show menuitems from the %SourceMenu and %SourceContext menus in your XData block. The "Server Command Menu..." will show menuitems from all other menus in that block.