[BUG] Long responses overflow from status bar causing UI rendering issues

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?

Claude Code displays long response text in the status bar, causing it to overflow and break the UI layout. The status bar should only display short status messages, not full conversation responses.

What Should Happen?

• Short status messages only in status bar (e.g., "Claude Code: Thinking...")
• Long responses should appear in:
• Editor area (main conversation view)
• Side panel or chat panel
• Notification popup for medium-length messages
• If status bar must be used, text should be truncated with ellipsis (...)

Error Messages/Logs

Steps to Reproduce

1. Use Claude Code to ask a question that generates a long response
2. Observe the status bar area on the right side of VSCode
3. Notice text overflowing beyond status bar boundaries

Claude Model

Sonnet (default)

Is this a regression?

I don't know

Last Working Version

2.0.73

Claude Code Version

2.0.73

Platform

Anthropic API

Operating System

Windows

Terminal/Shell

PowerShell

Additional Information

• The overflow text appears to be a Claude Code conversation response
• Text is in Japanese (CJK characters), but issue likely affects all languages
• This is a fundamental UI/UX design issue, not just a rendering bug

Environment

• OS: Windows 11
• VSCode Version: 1.107.1

Actual Behavior

• Full response text appears in status bar
• Text overflows beyond status bar boundaries
• Multiple lines appear outside the intended UI container
• Other UI elements become obscured
• UI becomes unusable

Screenshots

<img width="1916" height="467" alt="Image" src="https://github.com/user-attachments/assets/2f6854af-f135-430a-b3e7-28eb14e8e4b7" />

Suggested Fix

Follow VSCode's standard UI patterns:

• Use status bar only for brief status updates ("Ready", "Processing...", etc.)
• Display conversation responses in the main editor area or dedicated panel
• Implement text truncation if status bar display is necessary
• Add proper overflow handling