[BUG] Ctrl-Z (SIGTSTP) no longer backgrounds Claude Code in 2.1.1 (confirmed in iTerm2 and Ghostty)

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?

Potentially related to, but not the same as, https://github.com/anthropics/claude-code/issues/16520

Description:

After upgrading to Claude Code 2.1.0/2.1.1, Ctrl-Z no longer suspends/backgrounds the process. This worked in 2.0.76.

Environment:

• Claude Code 2.1.1
• macOS (Darwin 25.1.0)
• Multiple terminal emulators affected

Notes:

• Ctrl-Z works correctly with other processes (e.g., tail -f)
• Issue affects all Claude instances, including fresh terminals
• Terminal settings are correct (stty susp = ^Z)
• Seems to still work in native Terminal. Does not work in iTerm or Ghostty.

What Should Happen?

Expected: Process suspends and returns to shell prompt
Actual: Nothing happens

Error Messages/Logs

Steps to Reproduce

1. Start claude in iTerm2 or Ghostty
2. Press Ctrl-Z

Claude Model

None

Is this a regression?

Yes, this worked in a previous version

Last Working Version

2.0.76

Claude Code Version

2.1.1 (Claude Code)

Platform

Anthropic API

Operating System

macOS

Terminal/Shell

iTerm2

Additional Information

_No response_