If you do the virtual desktop correctly, they have basically the same delays as being there in person, the screen refresh and human ability to notice and interpret. They will be able to record the screen/session so could technically still copy the code but it would require a lot of work, but a NDA should help.
The locked down desktop should provide them all the access they need. You can decide if you want to allow them to print or not.
Just image that they are using Xwindows and exporting their displays back to their own computers.