[BUG] Claude Code 2.1.69 freezes on startup in specific project directories on Windows

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?

Claude Code 2.1.69 freezes on startup in specific project directories on Windows.
2.1.68 works fine in the same directory. Empty directories and small git repos work fine even on 2.1.69.

Debug log shows the process hangs after Ripgrep first use test: PASSED with no further output.
A non-fatal error Failed to save config with lock: Error: EEXIST: file already exists, mkdir 'C:\Users\<user>' appears in every run but also appears in working directories where startup succeeds, so it's not the direct cause.

What Should Happen?

Claude Code should start normally and display the TUI, as it does with version 2.1.68 in the same directory.

Error Messages/Logs

2026-03-05T09:54:05.642Z [DEBUG] Git remote URL: git@github.com:<org>/<repo>.git
2026-03-05T09:54:05.642Z [DEBUG] Parsed repository: null from URL: git@github.com:<org>/<repo>.git
2026-03-05T09:54:05.642Z [DEBUG] Not in a GitHub repository, skipping path mapping update
2026-03-05T09:54:05.739Z [DEBUG] [Claude in Chrome] Found brave profiles: Default
2026-03-05T09:54:05.761Z [DEBUG] [Claude in Chrome] Found edge profiles: Default
2026-03-05T09:54:05.777Z [DEBUG] [Claude in Chrome] Extension not found in any browser
2026-03-05T09:54:05.789Z [ERROR] Failed to save config with lock: Error: EEXIST: file already exists, mkdir 'C:\Users\<user>'
2026-03-05T09:54:06.291Z [DEBUG] Ripgrep first use test: PASSED (mode=builtin, path=C:\Users\<user>\.local\bin\claude.exe)
-- hangs here, no further output --

Steps to Reproduce

1. Install Claude Code 2.1.69 (native or npm) on Windows
2. Have a project directory with multiple subdirectories (e.g., frontend/, backend/, assets/, docker/, services/)
3. cd into the project directory
4. Run claude
5. TUI never renders. Process hangs indefinitely. Ctrl+C exits.

What was tested and ruled out (all still freeze):

• Removing project .claude/ directory
• Removing CLAUDE.md
• Removing .git
• Removing node_modules
• Creating an empty subdirectory inside the project and running claude from there
• Clearing ~/.claude/history.jsonl
• Setting NODE_TLS_REJECT_UNAUTHORIZED=0
• Removing proxy environment variables
• New PowerShell session
• PC restart

What works:

• Same directory with 2.1.68: starts normally
• Empty directory on same drive with 2.1.69: starts normally
• Home directory (C:\Users\<user>) with 2.1.69: starts normally
• Small git repo on same drive with 2.1.69: starts normally

Claude Model

Sonnet (default)

Is this a regression?

Yes, this worked in a previous version

Last Working Version

2.1.68

Claude Code Version

2.1.69 (Claude Code)

Platform

Anthropic API

Operating System

Windows

Terminal/Shell

PowerShell

Additional Information

• The project has ~77k files / 1.4GB total
• Using corporate proxy with SSL inspection
• Connected via VPN from home (but network was verified working: curl.exe to api.anthropic.com returns 404 through proxy)
• Git remote uses custom SSH host alias (git@github.com-work:)
• Debug log shows Parsed repository: null for the remote URL
• 2.1.69 changelog includes "Fixed global .claude folder detection on Windows" which may be related
• The [ERROR] Failed to save config with lock: EEXIST mkdir 'C:\Users\<user>' appears in BOTH working and non-working directories, so it is not the direct cause
• Working directory is on D: drive (not C:), but empty D: drive directories work fine on 2.1.69