[BUG] Files in src/ directory not appearing in @ file suggestions (VSCode extension)

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?

Description

Files inside the src/ directory do not appear in the @ file autocomplete suggestions in the VSCode extension. The entire src/ directory tree seems invisible to the file suggestion feature.

Steps to Reproduce

1. Have a Python project with a src/ layout (e.g., src/mypackage/module.py)
2. In the Claude Code VSCode extension input, type @src
3. No suggestions appear
4. Type the full path like @src/grace/cli/sync_dynamodb_to_lancedb.py
5. Shows "No files found"

Expected Behavior

Files in src/ should appear in autocomplete suggestions, just like files in other directories (e.g., docs/, terraform/).

Actual Behavior

• Typing @src shows no suggestions
• Typing full paths to files in src/ shows "No files found"
• Files in other directories like docs/ and terraform/ appear correctly
• The files exist, are readable, and are not in .gitignore

Environment

• Claude Code version: 2.0.76
• VSCode version: 1.107.1
• OS: macOS (Darwin 25.2.0)

Additional Context

• No .claudeignore file exists
• No deny rules in .claude/settings.local.json
• The src/ directory is not in .gitignore
• Files can be read normally by Claude using the Read tool
• The file is even shown as attached via IDE context (see screenshot)

Workaround

Files can still be accessed by:

• Opening the file in the editor (IDE context attaches it automatically)
• Mentioning the file path in the message without @

What Should Happen?

Files in the src/ directory should appear in @ file autocomplete suggestions, just like files in other directories (e.g., docs/, tests/, terraform/).

Error Messages/Logs

Steps to Reproduce

1. Have a Python project with a src/ layout (e.g., src/mypackage/module.py)
2. Open the project in VSCode with the Claude Code extension
3. In the Claude Code input, type @src
4. No suggestions appear
5. Type the full path like @src/mypackage/module.py
6. Shows "No files found" even though the file exists

Claude Model

Sonnet (default)

Is this a regression?

I don't know

Last Working Version

_No response_

Claude Code Version

2.0.76

Platform

Anthropic API

Operating System

macOS

Terminal/Shell

VS Code integrated terminal

Additional Information

_No response_