[BUG] Custom Instructions Not Loading from settings.json

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?

Environment

• Claude Code Version: 2.0.55
• Platform: macOS Darwin 25.1.0
• Model: claude-sonnet-4-5 via AWS Bedrock

## Configuration
File: ~/.claude/settings.json
```json
{
"customInstructions": "~/.claude/custom-instructions.md"
}

File: ~/.claude/custom-instructions.md

• Exists: ✅
• Readable: ✅
• Size: ~4KB markdown

Issue

Custom instructions are configured but not loaded into agent context at session start.

What Should Happen?

Agent should have custom instructions available automatically when session begins.

Error Messages/Logs

Steps to Reproduce

1. Add "customInstructions": "~/.claude/custom-instructions.md" to ~/.claude/settings.json
2. Create instructions file at that path
3. Start new session
4. Ask agent about custom guidelines
5. Agent doesn't have them in context

Verification

• Setting exists in config ✅
• File exists and is readable ✅
• Other settings from same file load correctly ✅
• Custom instructions do NOT load ❌

Claude Model

Sonnet (default)

Is this a regression?

I don't know

Last Working Version

_No response_

Claude Code Version

2.0.55

Platform

AWS Bedrock

Operating System

macOS

Terminal/Shell

iTerm2

Additional Information

_No response_