[BUG] Desktop 2.37337.1: project groups replaced by environments for only a few recent projects; all other projects' sessions mixed into one machine group

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?

After the desktop app updated itself to 2.37337.1, the Code tab sidebar stopped grouping my sessions by project.

Before the update, every project I work on had its own group, with that project's sessions underneath it. After the update:

• A handful of my recently used projects were turned into "environments" and still show as their own groups.
• Every other project lost its group. Their sessions are all piled into the single group for this machine, mixed together regardless of which project they belong to.
• "Group by" no longer offers "Project", so I can't switch back.

Nothing was deleted; each session still shows its folder under the title. But the sidebar no longer tells me which sessions belong together.

For context on why this hurts: I run hundreds of sessions, with dozens per project. Project grouping was the only thing that made that many sessions manageable. With most projects now dumped into one machine group, I can't find the session I need without scrolling through hundreds of unrelated rows.

What I find most disorienting is that this happened with no warning and no way to opt out. I didn't change any settings. The app updated overnight, and a workflow I depend on every day was gone the next morning. I can't tell which projects the migration kept, or why. I also can't find this change in the desktop changelog, so I can't plan around the next one. For a tool I depend on every day, an update that silently reorganizes hundreds of sessions makes the app feel unpredictable.

What Should Happen?

Within each environment, sessions should be grouped by project, so that one environment can hold several project groups instead of one flat list.

Grouping should also be flexible enough to rearrange:

• Move a whole project (all of its sessions) from one group to another.
• Move only some of a project's sessions to another group, while the rest stay where they are.

Error Messages/Logs

No error messages. The project grouping is simply gone from the sidebar and the "Group by" menu.

Steps to Reproduce

1. Have sessions in many project folders, with "Group by → Project" selected.
2. Let the desktop app auto-update to 2.37337.1.
3. Open the Code tab. Only a few recent projects still have their own group; the remaining projects' sessions are mixed into one machine group.
4. Open the sidebar menu → "Group by". "Project" is no longer an option.

Claude Model

None

Is this a regression?

Yes, this worked in a previous version

Last Working Version

_No response_

Claude Code Version

2.1.300

Platform

Anthropic API

Operating System

Windows

Terminal/Shell

Terminal.app (macOS)

Additional Information

This is a Desktop app (Code tab) issue, not a CLI issue.

Likely the same migration as #102171 and #102125 (only some project folders became environments, the rest fell into one group). Related: #102088, #102157, #102177, #102129.