[FEATURE] Add configuration option to always show diffs in VS Code editor instead of snippets in the UI

Preflight Checklist

• [x] I have searched existing requests and this feature hasn't been requested yet
• [x] This is a single feature request (not multiple features)

Problem Statement

When using the Claude Code VS Code extension, small file changes are displayed as inline snippets in the extension's UI panel, while large changes open in VS Code's diff editor view. This behavior is determined automatically by Claude Code with no user control, forcing users to accept whatever display method Claude chooses regardless of their workflow preferences.

Proposed Solution

Add a VS Code extension setting to control diff display behavior:

{
  "claudeCode.diffDisplay": "always-editor"
}

Or in VS Code settings UI:

• Claude Code: Diff Display Mode
• Options: auto (default), always-editor, always-snippet

This setting would allow users to force all file changes to open in VS Code's diff editor, regardless of change size.

Alternative Solutions

1. Per-session command: Add a command palette option Claude Code: Always Open Diffs in Editor that applies to the current session
2. Context menu option: Right-click on a snippet in the UI and select "Open in Editor" to view that specific change in the diff editor
3. Quick action button: Add an "Open in Editor" button next to snippet previews in the UI

Priority

Medium - Would be very helpful

Feature Category

Interactive mode (TUI)

Use Case Example

As a developer, I prefer reviewing all code changes in the VS Code editor where I have:

• Full syntax highlighting and language features
• Better context (seeing surrounding code)
• Familiar navigation shortcuts and editing capabilities
• VS Code's native diff tools for accepting/rejecting changes
• Consistent workflow regardless of change size
• Ability to easily tweak changes before accepting

The current snippet view in the extension UI works well for quick reviews, but for my workflow, I always want the full editor experience with all my configured editor features available.

Additional Context

• Platform: VS Code Extension (not terminal)
• Related issues: #1317, #5764, #8224 (diff editor bugs), #2502 (broader preview workflow improvements)
• Current workaround: None available - must accept whatever display method Claude Code chooses

bash
# Extract diffs from history
cat ~/.claude/projects/*/history.jsonl | \
  jq -r 'select(.content[].name == "edit_file") | .content[].input'