[Bug] PowerShell output truncation and formatting issues

Bug Description
Claude is unusable in windows powershell right now. Sentences cut off midway through, large empty gaps:

<img width="1718" height="682" alt="Image" src="https://github.com/user-attachments/assets/60349b01-2acb-47fe-9a42-b9484b2eec6b" />

Environment Info

• Platform: win32
• Terminal: windows-terminal
• Version: 2.0.73
• Feedback ID: 8f9047f1-022b-4fea-b886-54f99434836a

Errors

[{"error":"RangeError [ERR_CHILD_PROCESS_STDIO_MAXBUFFER]: stdout maxBuffer length exceeded\n    at Socket.onChildStdout (node:child_process:484:14)\n    at Socket.emit (node:events:508:28)\n    at Socket.emit (node:domain:489:12)\n    at addChunk (node:internal/streams/readable:559:12)\n    at readableAddChunkPushByteMode (node:internal/streams/readable:510:3)\n    at Readable.push (node:internal/streams/readable:390:5)\n    at Pipe.onStreamRead (node:internal/stream_base_commons:189:23)","timestamp":"2025-12-19T15:46:02.804Z"},{"error":"Error: Request was aborted.\n    at u0A._createMessage (file:///C:/Users/Jeremy/AppData/Roaming/npm/node_modules/@anthropic-ai/claude-code/cli.js:503:3157)\n    at process.processTicksAndRejections (node:internal/process/task_queues:105:5)","timestamp":"2025-12-19T15:47:58.214Z"}]