[BUG] Closing the chat panel destroys the entire conversation session. No persistence mechanism exists.

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?

Closing the chat panel destroys the entire conversation session. No persistence mechanism exists.

Expected Behavior

Conversation history should persist between panel sessions, similar to standard VSCode extension patterns and competitor tools.

Actual Behavior

Complete session loss. All context destroyed.

Technical Note

VSCode provides context.workspaceState and context.globalState APIs specifically for this use case. Session data should be serialized and restored on panel recreation.

Environment

• Platform: macOS (affects all platforms)
• Extension: Claude Code VSCode

What Should Happen?

Conversation history should persist between panel sessions, like other modern IDE extensions (GitHub Copilot Chat, JetBrains AI Assistant, Cursor, Continue.dev). Users should be able to close and reopen the panel without losing context. VSCode provides context.workspaceState and context.globalState APIs for this standard pattern.

Error Messages/Logs

Steps to Reproduce

1. Start conversation with Claude in VSCode extension
2. Build context (file reads, edits, multiple exchanges)
3. Close chat panel (Cmd+W / Ctrl+W)
4. Reopen panel
5. All context is lost

Claude Model

None

Is this a regression?

No, this never worked

Last Working Version

_No response_

Claude Code Version

2.0.67 (Claude Code)

Platform

Anthropic API

Operating System

macOS

Terminal/Shell

VS Code integrated terminal

Additional Information

_No response_