Bash tool output not displaying in VS Code extension

When using Claude Code in VS Code, bash tool outputs don't display properly. I only see "IN" (partial input indicator) without the actual command output.

Steps to reproduce:

1. Open Claude Code in VS Code
2. Ask Claude to run any bash command
3. Look at the tool result - shows "IN" and nothing for output

Expected: See notj the bash command input & output
Actual: Only see "IN"

Restarting the VS Code window temporarily fixes it, then it breaks again after first command.

Environment:

• macOS 15.3.1
• VS Code 1.104.0 (arm64)
• Claude Code extension 2.0.44