[BUG] @ file picker only shows HTML files in dropdown

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?

Environment:

• OS: macOS Darwin 24.6.0
• VSCode Version: 1.105.1
• Claude Code Extension Version: 2.0.26
• Project Type: Python/Flask application

Additional Context:

Verified no .claudeignore file exists
Verified no .claude/settings.json with filters
Verified no .vscode/settings.json restrictions
.gitignore does not exclude .py files
Project contains multiple Python files in various directories that should be discoverable
Issue persists across VSCode window reloads

What Should Happen?

Expected Behavior:

The @ file picker dropdown should display all file types including Python (.py) files that match the search query. Actual Behavior: The dropdown only shows HTML files. Python files do not appear in the autocomplete suggestions. Workaround: Typing the complete file path manually (e.g., @generate.py) successfully loads the file, but this bypasses the autocomplete functionality entirely.

Error Messages/Logs

Steps to Reproduce

Steps to Reproduce:

1. Open a Python project in VSCode with Claude Code extension installed
2. Start a chat with Claude
3. Type @ in the chat input to trigger the file picker
4. Type generate_ to search for Python files that start with "generate_"
5. Observe that no Python files appear in the dropdown autocomplete list
6. However, typing @scripts/ or similar shows only HTML files, not Python files

Claude Model

None

Is this a regression?

Yes, this worked in a previous version

Last Working Version

_No response_

Claude Code Version

2.0.26

Platform

Anthropic API

Operating System

macOS

Terminal/Shell

Terminal.app (macOS)

Additional Information

_No response_