What is wrong here?
You are using a setting name that has been deprecated. This setting is still probably still going to work ... for now ... but it is likely that it will stop working completely in a future release.
So what you need to do is to change your "settings.xml" to use "java.jdt.ls.java.home" as the property name instead of "java.home". It would be advisable to do this as soon as practical.
Note that there is more information on the VSCode for Java settings here. The current version of the page says this:
java.home : Deprecated, please use 'java.jdt.ls.java.home' instead. Absolute path to JDK home folder used to launch the Java Language Server. Requires VS Code restart.
However, if your real problem is that VSCode is telling you that your version of the Java JDK is incompatible and you need to download a new one, first read https://stackoverflow.com/questions/71042056/. Downloading a new JDK (as suggested by VSCode) may not be the best solution.
java.jdt.ls.java.homeinstead ofjava.homesince its deprecated this setting might be removed in later version of VS Code.