[BUG] Manually created project folders in ~/.claude/projects/ are ignored, causing confusion and instability

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?

Bug Description

When a user manually creates a folder with a clean name in ~/.claude/projects/ and selects it for Claude Code to use, Claude Code ignores the folder and creates a new one with its auto-generated path-encoded naming convention.

Environment

• OS: macOS (Darwin 24.6.0)

What Should Happen?

Expected Behavior

Claude Code should either:

• Respect and use manually-created project folders without creating new ones
• OR clearly communicate that manual folder creation is not supported and prevent selection of such folders
• OR at minimum, not offer manual folders as selectable options if they won't be used

Error Messages/Logs

Steps to Reproduce

Steps to Reproduce

1. Manually create a folder in ~/.claude/projects/ with a clean name (e.g., linear-dashboard-sushi)
2. Select this folder for Claude Code to use
3. Claude Code ignores the manual folder and creates a path-encoded version instead (e.g., -Users-joe-dickason--claude-projects-linear-dashboard-sushi)
4. Claude Code may hang or become unstable, possibly due to a mismatch between the selected folder and the one it actually uses

Actual Behavior

• Manually created folder appears to be ignored
• A new path-encoded folder is created instead
• The original manual folder's fate is unclear (may be deleted or just unused)
• Can cause instability/hanging, possibly due to folder path mismatch

Claude Model

Opus

Is this a regression?

I don't know

Last Working Version

_No response_

Claude Code Version

Claude 1.1.1890 (af393c) 2026-02-03T21:05:53.000Z

Platform

Anthropic API

Operating System

macOS

Terminal/Shell

Other

Additional Information

Additional Context

Other manually-created folders in ~/.claude/projects/ (e.g., embedded-zoom-experience, provider-cancellation-reason) continue to exist alongside the path-encoded versions, suggesting Claude Code creates parallel folders rather than renaming. However, the exact behavior is unclear and undocumented.

Claude Code in the MacOS app.