[BUG] Claude Code VSCode extension stops responding on Cursor — double activation and process duplication (works on v2.1.1)

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 Claude Code VSCode extension becomes completely unresponsive on Cursor v0.48.28. The extension panel loads but stops responding — no error messages, no crash notifications, it simply hangs and does not process any input.

From the output logs, the extension activates twice within ~14 seconds (on different MCP ports), spawning two duplicate Claude processes against the same working directory. Every initialization step is duplicated. The startup sequence never completes — logs go silent after MCP server initialization with no error or completion message.

Downgrading the extension to version 2.1.1 resolves the issue completely. The issue occurs with extension version 2.1.33 (and likely other recent versions above 2.1.1).

What Should Happen?

The Claude Code extension should activate once, spawn a single Claude process, and respond to prompts normally in Cursor, as it does with version 2.1.1.

Error Messages/Logs

Key findings from Output → Claude Code logs:

1. Double activation (two different MCP ports):
2026-02-07 10:32:21.963 [info] Claude code extension is now active?
2026-02-07 10:32:21.963 [info] MCP Server running on port 28815 (localhost only)
...
2026-02-07 10:32:36.153 [info] Claude code extension is now active?
2026-02-07 10:32:36.153 [info] MCP Server running on port 15715 (localhost only)

2. Two Claude processes spawned on the same cwd:
2026-02-07 10:32:28.629 [info] Spawning Claude with SDK query function - cwd: /Users/[REDACTED]/Documents/paygroup-app, permission mode: default, version: 2.1.33
2026-02-07 10:32:28.685 [info] Spawning Claude with SDK query function - cwd: /Users/[REDACTED]/Documents/paygroup-app, permission mode: default, version: 2.1.33

3. All initialization steps are duplicated — permission loading, plugin loading, skill loading, MCP server connections all happen twice in parallel.

4. Multiple MCP servers fail auth silently:
MCP server "github": No token data found
MCP server "context7": No token data found
MCP server "expo-mcp": Token expired without refresh token

5. Logs go completely silent — no error, no crash, no startup completion message. The initialization sequence never finishes.

Steps to Reproduce

1. Open Cursor v0.48.28 on macOS (Apple Silicon)
2. Install the latest Claude Code VSCode extension (v2.1.33)
3. Open a project workspace (in this case a Bun monorepo with multiple MCP servers configured: convex, atlassian, playwright, github, context7, expo-mcp)
4. Open the Claude Code panel in the sidebar
5. Attempt to interact with the extension (type a prompt, send a message)
6. Observe that the extension stops responding — no output, no error, completely unresponsive
7. Check Output → Claude Code logs: extension activates twice, two Claude processes spawned, logs go silent

Workaround:

1. Uninstall or disable the current Claude Code extension
2. Install version 2.1.1 of the extension
3. The extension works normally again on v2.1.1

Claude Model

Opus

Is this a regression?

Yes, this worked in a previous version

Last Working Version

2.1.1

Claude Code Version

2.1.34 (Claude Code)

Platform

Anthropic API

Operating System

macOS

Terminal/Shell

Cursor

Additional Information

• Cursor version: 0.48.28
• Crashing extension version: 2.1.33 (anthropic.claude-code-2.1.33-darwin-arm64)
• Working extension version: 2.1.1 (anthropic.claude-code-2.1.1-darwin-arm64)
• Regression: Yes — this worked in extension version 2.1.1 and broke in a subsequent update.
• The CLI version of Claude Code (claude in terminal) continues to work fine.
• 6 MCP servers configured (convex, atlassian, playwright, github, context7, expo-mcp), which may contribute to the issue due to the duplication doubling the number of concurrent MCP connections.
• Shell: zsh