Feature Request: Add option to collapse/minimize tool output (diff views)

Problem Description

When Claude Code performs file operations (Read, Edit, Update), the tool outputs display detailed diff views directly in the conversation. During longer sessions with multiple file modifications, these large code blocks accumulate and make it difficult to scroll back and review previous Q&A exchanges.

Current Behavior

• Tool outputs (especially Edit/Update diffs) are always displayed in full detail
• There is no way to collapse, minimize, or hide these outputs
• Output style settings only affect Claude's text responses, not tool execution results
• The conversation becomes cluttered with large code blocks over time

Expected Behavior

It would be helpful to have options such as:

1. Collapsible tool outputs - Allow users to expand/collapse diff views with a click
2. Compact mode - Show only a summary (e.g., "Modified 26 lines in file.md") with option to expand
3. Configurable verbosity - A setting to control tool output detail level (full/summary/minimal)
4. Auto-collapse old outputs - Automatically collapse tool outputs from earlier in the conversation

Use Case

When working on documentation or code refactoring tasks that involve many file edits, the conversation quickly fills with diff outputs. This makes it hard to:

• Find previous questions and answers
• Review the conversation flow
• Navigate the chat history efficiently

Additional Context

• Ctrl+O verbose toggle doesn't seem to affect tool output display
• Output styles only control Claude's response format, not UI-rendered tool results
• This appears to be a client-side UI feature request rather than a model behavior change

Thank you for considering this enhancement!