[BUG] New message for every word

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?

Normal text output is constantly making newlines, although prompts for subagents, plans and code patches work just fine.
Screenshot of what's happening:

<img width="477" height="302" alt="Image" src="https://github.com/user-attachments/assets/09756f46-35f2-4a91-abbf-7346b5d89de8" />

What Should Happen?

Claude should type normally as it did before, not sure really how to describe the normal behavior. I guess not make newlines for every word?

Error Messages/Logs

Steps to Reproduce

1. Say literally anything to claude either in terminal or vscode extension.
2. Look at the regular text output.

Claude Model

Sonnet (default)

Is this a regression?

Yes, this worked in a previous version

Last Working Version

2.0.49

Claude Code Version

2.0.51

Platform

Anthropic API

Operating System

macOS

Terminal/Shell

Cursor

Additional Information

_No response_