Add dedicated VS Code chat sidebar view (like GitHub Copilot Chat) instead of using VS Code panel system

Preflight Checklist

• [x] I have searched existing requests and this feature hasn't been requested yet
• [x] This is a single feature request (not multiple features)

Problem Statement

Currently, Claude Code runs in the VS Code panel system (the same area used by Terminal, Problems, Output, etc.). This prevents users from achieving an optimal multi-panel layout. Current Limitation: When Claude Code is positioned in the right panel, the terminal panel sits below it and extends across the full width of the window - spanning from the left sidebar, under the editor area, and under the Claude chat area.
This means:
Claude Code chat cannot extend to the full height of the window
The terminal cannot be confined to just the editor/middle column
The terminal takes up space under the chat panel where it's not needed

Proposed Solution

GitHub Copilot Chat uses VS Code's auxiliary sidebar or dedicated chat view, which is independent of the panel system. This allows for a much better layout where:
The chat sidebar extends the full height of the window on the right side
The terminal panel remains confined to just the middle/editor column (below the editor)
The terminal doesn't waste space extending under the chat area
This creates a more efficient use of screen space with the chat always visible at full height while the terminal stays in the editor context where it's most relevant.

Implement Claude Code chat as a dedicated sidebar view (similar to GitHub Copilot Chat) rather than using the VS Code panel system. This would:
Allow the chat to be positioned as a full-height sidebar (left or right)
Enable the terminal panel to remain confined to the editor area only
Significantly improve the developer experience for multi-panel workflows
Provide better parity with other AI coding assistant extensions

Alternative Solutions

There isn't a solution I've tried that actually works like the Copilot extension chat window.

Priority

Medium - Would be very helpful

Feature Category

Configuration and settings

Use Case Example

I'm working interactively with Claude Code Chat and the terminal in VS Code
I have to constantly scroll in the chat window because the terminal extends below the chat window, making it too small.
I tried creating a suitable split window for the terminal in the editor window, but it does not contain the other terminal tabs, and when files are opened by the chat, they appear in a chat window tab, not the main editor window.

Additional Context

_No response_