There is a proposed API called notebookKernelSource. This seems to have been introduced for and indeed is in active use by the MS Jupyter extension.
I would like to use this API extension to do the same thing as the Jupyter extension, get involved in the notebook kernel selection process. Since this is a proposed API, as a third party developer I can't make use of it, whereas Microsoft published extensions can through the "extensionEnabledApiProposals" mechanism in the VSCode "product.json" file.

Since this API is now in use by a published extension, even a Microsoft published one, changing it would be hard. However, since it is only in use by a Microsoft published extension, and those can use proposed APIs, there seems to be no incentive to promote this to stable. I'm hoping that this is because no one has asked for it to be promoted rather than for any other reason of competitive advantage for example.

It's slightly unclear from the wiki page exactly what the process is by which an API proposal gets promoted. If this isn't an appropriate way, then please let me know and point me at the appropriate mechanism.

Pinging @rebornix and @DonJayamanne in the first instance as they are the two committers of the dts file.