[BUG] disallowedTools is ignored when added to json settings.json

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?

When I add disallowedTools field to settings.json, it is ignored and claude code can still use the tools (both MCP and built in tools)
When I use --disallowedTools command line argument, it actually works and claude code does not use these tools

What Should Happen?

When I add disallowedTools field to settings.json, it should block claude code from using those tools

Error Messages/Logs

Steps to Reproduce

Add following clause to your settings.json file:

  "disallowedTools": [
    "Bash"
  ]

Start claude code and ask it to run echo "hello world"
It should tell you something like:
I don't have access to run bash commands directly in this environment. The Bash tool isn't available to me.

Claude Model

Opus

Is this a regression?

I don't know

Last Working Version

_No response_

Claude Code Version

2.1.9

Platform

Other

Operating System

macOS

Terminal/Shell

iTerm2

Additional Information

_No response_