[Bug] Environment variables from .claude/settings.json not injected into Bash on Windows

Description:
Environment variables defined in the env section of .claude/settings.json are not available when executing Bash
commands on Windows.

Steps to Reproduce:

1. Create .claude/settings.json in your project with an env section:

{
"env": {
"AZURE_DEVOPS_PROJECT": "MDaemon10"
}
}

1. Ask Claude Code to check the environment variable value using Bash
2. Run echo %AZURE_DEVOPS_PROJECT% (cmd) or echo $env:AZURE_DEVOPS_PROJECT (PowerShell)

Expected Behavior:
The command should output MDaemon10

Actual Behavior:
The command outputs the literal string %AZURE_DEVOPS_PROJECT% (indicating the variable is not set)

Environment:

• OS: Windows (include your version, e.g., Windows 11)
• Claude Code version: (run claude --version)
• Shell: cmd.exe / PowerShell (whichever you use)

Additional Context:
The settings file is correctly formatted and readable by Claude Code (it can read the file contents), but the
environment variables are not being passed to the shell execution context.