Images appear as numbered items before prompt instead of inline

What went wrong?

When pasting images into a prompt, they now appear as numbered items (e.g., [Image #1]) displayed before the prompt text, rather than inline at the position where they were pasted.

Previously, images appeared inline within the prompt text at the exact location where they were pasted, making it easier to reference specific images in context.

What should happen?

Images should appear inline at the cursor position where they were pasted, not be extracted and displayed as a separate numbered list before the prompt.

Ideally, this behavior should be configurable - some users may prefer the numbered format, while others prefer the inline placement.

Steps to reproduce

1. Start a Claude Code session
2. Type some text in the prompt
3. Paste an image
4. Type more text after the image
5. Observe that the image appears as [Image #1] before all the text, not inline

Environment

• Version: 2.0.76 (Claude Code)
• OS: macOS Tahoe 26.2
• Terminal: WarpTerminal
• Platform: Anthropic API
• Model: Opus

Is this a regression?

Yes - images previously appeared inline at the paste position.