[BUG] Claude Code doesn't work after the last update of VS Code

Preflight Checklist

• [x] I have searched existing issues and this hasn't been reported yet
• [x] This is a single bug report (please file separate reports for different bugs)
• [x] I am using the latest version of Claude Code

What's Wrong?

Bug report

Claude Code was working, after an update of VS Code, Claude Code extension doesn't show the interface.

The interface doesn't show, see the image below
<img width="1559" height="821" alt="Image" src="https://github.com/user-attachments/assets/d63a823d-2c2d-477d-8cc7-cfaa8df7dbd2" />

VS Code INFO

Version: 1.141.1 (user setup)
Commit: 7baac39ec3ca969dab74ac12c097f6a486e46593
Date: 2026-10-12T12:00:06-07:00
Electron: 43.7.7
ElectronBuildId: 15553055
Chromium: 150.0.7871.250
Node.js: 24.21.0
V8: 15.0.245.31-electron.0
@github/copilot: 1.0.92-4.unstable.r37397886721.gad270aa
@github/copilot-sdk: 1.0.17.37397886721.gad270aa
OS: Windows_NT x64 10.0.26200

Machine info

Windows 11 with WSL
No LSB modules are available.
Distributor ID: Ubuntu
Description: Ubuntu 22.04.5 LTS
Release: 22.04
Codename: jammy

Taken actions

1. Restart the machine but same behavior.
2. Uninstall Claude Code extension and re-install it again but same behavior.

What Should Happen?

I can't use Claude Code from VS Code.

Error Messages/Logs

## Claude VS Code logs: 
2026-10-13 20:17:39.868 [info] AuthManager initialized
2026-10-13 20:17:39.868 [info] Claude code extension is now active?
2026-10-13 20:17:39.868 [info] MCP Server running on port 43755 (localhost only)
2026-10-13 20:17:39.868 [info] Getting authentication status
2026-10-13 20:17:39.868 [info] OAuth tokens found in secure storage
2026-10-13 20:17:39.868 [info] AuthManager initialized

Steps to Reproduce

1. Open a WSL terminal on Windows 11
2. Go to project path, and type 'code my-repo-name'
3. Claude Code doesn't show the interface.

Claude Model

None

Is this a regression?

Yes, this worked in a previous version

Last Working Version

2.1.296

Claude Code Version

2.1.296 (Claude Code)

Platform

Anthropic API

Operating System

Windows

Terminal/Shell

WSL (Windows Subsystem for Linux)

Additional Information

_No response_