Ctrl+C does not stop node server in Command Line from VS Code

In VS Code you will see a pull-down menu at the top of the terminal in the right corner. If you are in a running node app and want to close it or you are "stuck" the pull-down menu should say node. Click the trashcan (kill terminal) next to the list to close the running node app. You should be returned to the terminal unless you have something else running like another node app. Select bash, powershell, etc from the pull-down menu to navigate back to your command line.

I had the same problem as OP, and RaelB's answer didn't help.

What I did was "disallowed chords" by going to the User Settings (Ctrl + Alt + S on Windows) > User Tab (not Workspace tab) > Features > Terminal and unchecked the Integrated: Allow Chords checkbox.

Now I can use my terminal as I would use a regular Windows terminal.

Here's an image of the settings: