[BUG] API Error 400 "tool use concurrency issues" on every tool call in VSCode extension

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?

The VSCode extension throws "API Error: 400 due to tool use concurrency issues" on every single tool call, including simple sequential calls. The error occurs immediately after making any request that requires a tool call (Read, Bash, Glob, etc.). Even the simplest commands like pwd trigger this error, making the extension completely unusable.

What Should Happen?

Tool calls should execute successfully. Even if there were actual concurrency issues with parallel calls, single sequential tool calls (like checking the current directory with pwd) should work without errors.

Error Messages/Logs

API Error: 400 due to tool use concurrency issues.
This error appears on every tool call attempt, regardless of complexity or whether calls are parallel or sequential.

Steps to Reproduce

1. Open VSCode with Claude Code extension installed
2. Open any workspace (in this case, a Git repository with .claude configuration)
3. Start a new Claude Code session
4. Make any request that triggers a tool call, such as:

• "What files are in this directory?"
• "Read this file"
• Any simple request

1. Observe that every tool call fails with the 400 error
2. Even starting completely new sessions doesn't resolve the issue

Claude Model

Sonnet (default)

Is this a regression?

Yes, this worked in a previous version

Last Working Version

Unknown - it was working in recent sessions but started failing persistently

Claude Code Version

[Need to check - using VSCode extension, not CLI]

Platform

Anthropic API

Operating System

Windows

Terminal/Shell

VS Code integrated terminal

Additional Information

What I've already tried:

Started multiple new sessions
Completely uninstalled and reinstalled the Claude Code extension
Rebooted the computer
Verified API key is valid
Confirmed not hitting rate limits (get different error for that)
Key observations:

100% reproducible on every single tool call
Happens with both single calls and parallel calls
Error persists across sessions and after reinstall
The error message mentions "concurrency issues" even when making single, non-concurrent calls
This makes the extension completely unusable as no file operations or commands can be executed