PowerShell 7: Assistant text output shows blank lines, only first/last line visible

Description

When running Claude Code in PowerShell 7, assistant text responses display incorrectly. Multi-line responses show blank lines in the middle, with only the first or last line being visible.

Environment

• Claude Code version: 2.0.73
• Terminal: PowerShell 7
• OS: Windows

Steps to Reproduce

1. Run claude in PowerShell 7
2. Ask Claude to write any multi-line response (e.g., a short story or explanation)
3. Observe that most lines appear blank, with only the first or last line visible

Expected Behavior

All lines of text should be visible.

Actual Behavior

• Multi-line text shows blank lines in the middle
• Only the first and/or last line is visible
• Built-in commands like /context and /doctor display correctly with all formatting

Additional Notes

• Issue started recently (within hours of report)
• Restarting PowerShell does not fix the issue
• Running chcp 65001 does not fix the issue
• Running pwsh -NoProfile does not fix the issue
• The issue appears specific to assistant text output, not CLI UI elements