[FEATURE] Add properly formatted code blocks to VS Code extension

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

Right now, code is shown in a weird grey letter background formatting:

<img width="507" height="377" alt="Image" src="https://github.com/user-attachments/assets/1d91f331-6c86-4942-af09-39bedbe7ca41" />

Proposed Solution

Please use proper code block formatting, like what is available in all other AI coding extensions like copilot, cline etc.:

<img width="658" height="456" alt="Image" src="https://github.com/user-attachments/assets/4d221e2f-a786-4588-a90d-c240e879c8ff" />

Alternative Solutions

_No response_

Priority

High - Significant impact on productivity

Feature Category

Interactive mode (TUI)

Use Case Example

_No response_

Additional Context

_No response_