[BUG] VS Code extension ignores CLAUDE_CONFIG_DIR environment variable

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?

The VS Code extension does not respect the CLAUDE_CONFIG_DIR environment variable, even when set via claudeCode.environmentVariables in VS Code settings or when launching VS Code from a shell where the variable is exported.

The CLI correctly uses CLAUDE_CONFIG_DIR to support multiple profiles/accounts, but the extension always reads from and writes to ~/.claude/ regardless of configuration.

What Should Happen?

The extension should respect CLAUDE_CONFIG_DIR the same way the CLI does, allowing users to maintain separate configurations (e.g., work vs personal accounts) per VS Code profile.

Error Messages/Logs

Steps to Reproduce

1. Create a custom config directory (e.g., ~/.claude-personal)
2. Set CLAUDE_CONFIG_DIR via one of:

• claudeCode.environmentVariables in VS Code settings:

     "claudeCode.environmentVariables": [
         { "name": "CLAUDE_CONFIG_DIR", "value": "/path/to/.claude-personal" }
     ]

• Exporting the variable before launching VS Code:

     export CLAUDE_CONFIG_DIR="$HOME/.claude-personal"
     /Applications/Visual\ Studio\ Code.app/Contents/Resources/app/bin/code

1. Open the Claude Code extension
2. Observe that the extension prompts for login and creates files in ~/.claude/ instead of the configured directory

Claude Model

None

Is this a regression?

No, this never worked

Last Working Version

_No response_

Claude Code Version

2.1.63

Platform

Anthropic API

Operating System

macOS

Terminal/Shell

Terminal.app (macOS)

Additional Information

Related Issues

• #261 - Added CLAUDE_CONFIG_DIR support for CLI
• #4739 - /ide command fails when CLAUDE_CONFIG_DIR is set (locked)
• #24963 - Support for multiple accounts/profiles

Environment

• VS Code Version: 1.109.5 (arm64)