[BUG] Claude Code VSC Plugin Hangs Intermittently

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?

TL:DR - if you see this in our VSC CC Terminal Output window... you're done:

<date> <time> [info] MCP Server running on port 64582 (localhost only)

Using VSC on Windows 11 with version 3,333,635 running (at the moment of submission).

My expeirence over the last 24 hours is a worsening of the issue where any new CC4VSC terminal instances may a) either not function at all from launch b) may stop functioning after any amount of use - could be nearly immediately or could be after very very long running conversations that have seen multiple compactions. There is a universal truth that I've observed, if you are watching the Output tab in your terminal and have it set to display Claude VSCode, the moment you see the following message - you're dead. in the water until you Developer Reload or Exit and Restart VSC - and even then, you may need to repeat this multiple times to get back into a working state again.

<date> <time> [DEBUG] Plugin autoupdate: checking installed plugins
<date> <time> [info] MCP Server running on port 64582 (localhost only)
OR

<date> <time> [info] Claude code extension is now active?
<date> <time> [info] MCP Server running on port 64582 (localhost only)

What I've also observed in my environment is that opening additional CC terminal sessions increases the probability that you will encounter the issue and when it happens - ALL of your running CC terminals are effectively no longer working and will only appear to be running. You will not see any further output in the terminal debug window again.

Further, when you do a Developer Reload - OR - You open a new CC terminal tab/window, if you do not wait until after the plugin looks for a new version, and see confirmation that it's not given the MCP server message output - you seem to increase the likliehood that the MCP message will happen. It seems impotant to be patient and let the plugin thoroughly complete it's full startup sequence w/o interruption for some reason and I'm not entirely convinced this isnt possibly related to looking for new versions given that the MCP message arrives immediately after that statement ever single time w/o fail (if it happens).

Additionally, looking through 'recent conversations' and attempting to load those also seems to potentially increase the probability that this will happen.

This last time, I was using a single Claude terminal session - no others loaded at all - after a good while of performing normally, the entire VSC platfrom seemed to do a 'reload' on it's own, and the dreaded error as present in the output window. I immediately tried a Developer Reload - that didnt work, which is typical - you most often seem to have to completely close the 'offending session terminal' - relaunch a new terminal and if you're lucky, you can open up recent conversations and potentially do a resume - if you can get it to load.

What Should Happen?

it should continue functioning untl you're done with it.

Error Messages/Logs

Steps to Reproduce

1. Launch Claude Code plugin via Visual Studio Code.
2. Use it.
3. Wait for it to stop working.
4. Verify the error in Output window with Claude VSCode selected for filter.

Claude Model

Opus

Is this a regression?

Yes, this worked in a previous version

Last Working Version

_No response_

Claude Code Version

3,333,635

Platform

Anthropic API

Operating System

Windows

Terminal/Shell

VS Code integrated terminal

Additional Information

_No response_