[BUG] VS Code extension login prompt not bypassed with claudeCode.disableLoginPrompt: true when using Microsoft Foundry

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?

Login screen keeps reappearing. Terminal CLI works correctly with the same configuration.

What Should Happen?

Extension should skip login and connect directly to Foundry.

Error Messages/Logs

Not logged in · Please run /login


Unable to connect to API (ENOTFOUND)
The remote name could not be resolved: 'com-azureai-defaultproj-prod.services.ai.azure.com'

Steps to Reproduce

Environment:

Claude Code version: v2.1.62
VS Code version: (check Help → About)
OS: Windows 11
Provider: Microsoft Azure AI Foundry

Problem:
When using claudeCode.disableLoginPrompt: true in settings.json along with claudeCode.env configured for Microsoft Foundry, the VS Code extension panel still shows the login screen. Every time a message is typed, it resets back to the login page.
Settings used:
json"claudeCode.disableLoginPrompt": true,
"claudeCode.env": {
"CLAUDE_CODE_USE_FOUNDRY": "1",
"ANTHROPIC_FOUNDRY_RESOURCE": "...",
"ANTHROPIC_FOUNDRY_API_KEY": "..."
}

Claude Model

Sonnet (default)

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

VS Code integrated terminal

Additional Information

_No response_