VS Code diff preview tab regression in v2.1.59–2.1.61

Bug Description

The diff preview that opens in a separate VS Code editor tab when using "ask before edits" mode stopped working after updating to v2.1.59+. Reverting to v2.1.56 restores the expected behavior.

Previous behavior (v2.1.56 and earlier)

When Claude proposes an edit in "ask before edits" mode, a separate diff editor tab opens showing the full file with proposed changes highlighted in context.

Current behavior (v2.1.59–2.1.61)

No diff tab opens. The edit is only shown as a small inline snippet in the chat panel.

Steps to reproduce

1. Install Claude Code extension v2.1.61
2. Set permission mode to "ask before edits"
3. Ask Claude to make an edit to any file
4. Observe: no diff tab opens in the editor

Workaround

Downgrade to v2.1.56:

code --install-extension anthropic.claude-code@2.1.56 --force

Then disable auto-update for the extension.

Environment

• VS Code (macOS, Darwin 24.6.0)
• Claude Code extension v2.1.61 (broken), v2.1.56 (working)
• The regression was introduced between v2.1.56 (Feb 25) and v2.1.59 (Feb 26)

Related issues

• #8509 — similar symptom from the v2.0.0 era, but this is a new regression
• #16297 — diffs not appearing at all
• #8660 — edit preview/diff not showing