[BUG] Multi-line paste corrupts `$'` sequences in Claude Code CLI input

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?

When pasting a multi-line block into Claude Code CLI, lines containing $' get transformed/corrupted.
The same text may behave differently when pasted line-by-line vs as one block.

This breaks valid code/text, including Python/Matplotlib LaTeX strings like:
plt.xlabel(r'$\log_{10}(\mu/\text{GeV})$', fontsize=14)
plt.ylabel(r'$\alpha_i^{-1}$', fontsize=14)

where these line would show in the CLI as:
plt.xlabel(r'$\log_{10}(\mu/\text{GeV}), fontsize=14)
plt.ylabel(r'$\alpha_i^{-1}, fontsize=14)

This leads the model to incorrectly decide that the code has a bug (missing $' in these two lines).

This is a general pattern, as pasting something like:
X$'Y
X$$'

would show in the CLI as:
XY
X$'

What Should Happen?

pasting multiple-lines containing $', should perserve $' (which currently doesn't happen as mentioned above).
Example:
plt.xlabel(r'$\log_{10}(\mu/\text{GeV})$', fontsize=14)
plt.ylabel(r'$\alpha_i^{-1}$', fontsize=14)
X$'Y
X$$'

Error Messages/Logs

Steps to Reproduce

Paste this entire block at once into Claude Code CLI:

plt.xlabel(r'$\log_{10}(\mu/\text{GeV})$', fontsize=14)
plt.ylabel(r'$\alpha_i^{-1}$', fontsize=14)
X$'Y
X$
abc
X$$'

Observed output:

plt.xlabel(r'$\log_{10}(\mu/\text{GeV}), fontsize=14)
plt.ylabel(r'$\alpha_i^{-1}, fontsize=14)
XY
X$
abc
X$'

Claude Model

Opus

Is this a regression?

I don't know

Last Working Version

_No response_

Claude Code Version

v2.1.62

Platform

Other

Operating System

Windows

Terminal/Shell

PowerShell

Additional Information

• Pasting some of these lines individually can behave differently (for example X$'Y may stay intact alone).
• Corruption is consistent when they are pasted as a multi-line block.
• This corrupts code snippets on paste, leading the model to report"fake" bugs.

This looks like JavaScript replacement-string semantics being applied to pasted text in a block path:

• $' interpreted specially (post-match substitution) and removed/mutated
• $$ collapsing to $