CLAUDE.md parent directory traversal is a security/privacy concern

Problem

Claude Code recursively walks up the directory tree from the working directory to / and reads every CLAUDE.md it finds. This behavior is not configurable.

This is a security and privacy concern:

1. Unintended context leakage: Starting Claude Code in ~/projects/foo/bar/ silently loads CLAUDE.md from ~/projects/foo/, ~/projects/, ~/, etc. — directories the user never explicitly pointed Claude at. In a workspace with multiple unrelated projects under a shared parent, this leaks instructions and context from one project into another.

1. No user awareness: There is no indication that parent CLAUDE.md files were loaded. The user has no way to know that files outside their working directory are influencing Claude's behavior.

1. No opt-out: The traversal is hardcoded. There is no setting to disable or limit it.

Expected behavior

At minimum, provide a configuration option to control this behavior. Possible approaches:

• A setting to disable parent directory traversal entirely (only load CLAUDE.md from the working directory)
• A setting to limit traversal to the git repository root
• A setting to set an explicit boundary (e.g., stop at a specific directory)
• Display which CLAUDE.md files were loaded at startup so the user is aware

Current behavior

Claude Code unconditionally recurses from cwd up to (but not including) /, loading every CLAUDE.md and CLAUDE.local.md it encounters.