[BUG] VS Code extension ignores third-party provider environment variables during authentication check

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?

The AuthManager checks for authentication before reading environment variables from .claude/settings.json or claudeCode.environmentVariables. When using Microsoft Foundry with CLAUDE_CODE_USE_FOUNDRY=1 and related variables, the extension still prompts for login. The terminal version works correctly with the same configuration.

What Should Happen?

Extension should check for third-party provider environment variables before requiring authentication

Error Messages/Logs

Extension reports "No authentication found" and blocks usage

Steps to Reproduce

Create setting in the .claude/settings.json
{
"env": {
"CLAUDE_CODE_USE_FOUNDRY": "1",
"CLAUDE_CODE_SKIP_AUTH_LOGIN": "1",
"ANTHROPIC_FOUNDRY_RESOURCE": "xxxx",
"ANTHROPIC_FOUNDRY_API_KEY": "yyyyy",
"ANTHROPIC_DEFAULT_SONNET_MODEL":"claude-sonnet-4-5",
"ANTHROPIC_DEFAULT_HAIKU_MODEL":"claude-haiku-4-5"
}
}
Launch the extension

Claude Model

Sonnet (default)

Is this a regression?

I don't know

Last Working Version

_No response_

Claude Code Version

extension version 2.0.53

Platform

Other

Operating System

Ubuntu/Debian Linux

Terminal/Shell

WSL (Windows Subsystem for Linux)

Additional Information

This works if you launch vs code with a script:

#!/bin/bash
export CLAUDE_CODE_USE_FOUNDRY=1
export CLAUDE_CODE_SKIP_AUTH_LOGIN=1
export ANTHROPIC_FOUNDRY_RESOURCE=xxxx
export ANTHROPIC_FOUNDRY_API_KEY=yyyy
export ANTHROPIC_DEFAULT_SONNET_MODEL=claude-sonnet-4-5
export ANTHROPIC_DEFAULT_HAIKU_MODEL=claude-haiku-4-5

code "$@"
EOF