[BUG] v2.1.19 Unable to include folders using '@' 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?

<img width="511" height="120" alt="Image" src="https://github.com/user-attachments/assets/8d223002-e622-40d6-aa0c-e424741506da" />

I am unable to select folders using '@' in claude code vs code extension. I haven't checked it in command line. I propose to fix this bug if someone can guide me because I'm new to this repo. Thanks!

What Should Happen?

'@' should include folders along with files not just files.

Error Messages/Logs

Steps to Reproduce

1. Create a directory say .claude.
2. Make a .claude/settings.json file.
3. Start claude code on VS Code.
4. Write '@' in the input file.
5. Write '.claude' just after '@'.
6. You can not see or select any folders in suggestions.

Claude Model

None

Is this a regression?

I don't know

Last Working Version

_No response_

Claude Code Version

2.1.19

Platform

Anthropic API

Operating System

Windows

Terminal/Shell

Non-interactive/CI environment

Additional Information

_No response_