[FEATURE] Option to show file names during Read/Search instead of collapsed count

Preflight Checklist

• [x] I have searched existing requests and this feature hasn't been requested yet
• [x] This is a single feature request (not multiple features)

Problem Statement

Previously, Claude Code displayed actual file names being read/searched in real-time. Now it only shows collapsed summaries like "Read 3 files (ctrl+o to expand)".

This reduces visibility into what Claude is doing. Pressing Ctrl+O to expand is:

• An extra step that interrupts workflow
• Laggy/slow to respond
• Only shows results after the fact, not in real-time

I want to see file paths AS Claude reads/searches them.

Proposed Solution

Add a granular setting to control tool output verbosity, separate from the existing --verbose flag (which controls everything).

Something like:

{
  "toolOutputVerbosity": "expanded"  // or "collapsed"
}

This would specifically control whether Read/Grep/Glob tool outputs show:

• "collapsed": Current behavior - "Read 3 files (ctrl+o to expand)"
• "expanded": Old behavior - Shows each file name as it's being processed

The existing --verbose flag is too broad - it affects everything. This would be a targeted setting for just tool output display.

Alternative Solutions

• Using Ctrl+O to expand, but it's laggy and after-the-fact
• Using --verbose flag, but it's too broad and affects other output
• Related to #17027 (scrollable verbose output) but this is about default display behavior

Priority

High - Significant impact on productivity

Feature Category

Configuration and settings

Use Case Example

1. Ask Claude to investigate a bug
2. Claude starts reading files
3. Current: See "Read 5 files" - no idea which files, must Ctrl+O
4. Desired: See each file path as Claude reads it, follow along in real-time

Additional Context

This was the original behavior before a recent update. Requesting a setting to restore it for users who prefer more visibility into Claude's actions.