[BUG] M4 Max w\Sequoia 15.73 and VSCode 1.109.4 Ext: Claude 2.1.45 no longer work (Terminal in VSCode does work)

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?

I now get the following error in claude extension 2.1.45: API Error: 400 {"type":"error","error":{"message":"Operation failed","code":"500"},"request_id":"20260218073218e24fd94c16cd4514"}

What Should Happen?

claude visio studio code extension would appear on the ide (still does) but when I try to communicate with it, it gives me this error:

API Error: 400 {"type":"error","error":{"message":"Operation failed","code":"500"},"request_id":"20260218073218e24fd94c16cd4514"}

Note: Visio Studio Code terminal does work

Error Messages/Logs

API Error: 400 {"type":"error","error":{"message":"Operation failed","code":"500"},"request_id":"20260218073218e24fd94c16cd4514"}

Steps to Reproduce

launch vscode
claude code extensions should already be running
use claude code extensions panel
(Note: vscode terminal option and running claude via terminal "does" work)

Claude Model

None

Is this a regression?

Yes, this worked in a previous version

Last Working Version

[BUG] M4 Max w\Sequoia 15.73 and VSCode 1.109.4 Ext: Claude 2.1.45 no longer work (Terminal in VSCode does work)

Claude Code Version

2.1.45

Platform

Other

Operating System

macOS

Terminal/Shell

Terminal.app (macOS)

Additional Information

it was working 8hrs ago, nothing nothing nothing has changed no update! other than office (beta)