[BUG] VS Code extension fails to detect Git Bash on Windows despite CLAUDE_CODE_GIT_BASH_PATH being set

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?

OS: Windows 10/11
Claude Code extension version: 2.1.68 / 2.1.69
Git Bash path: C:\Program Files\Git\bin\bash.exe

What's wrong:
The VS Code extension shows "requires git-bash" error even though:

• Git Bash is installed and working
• CLAUDE_CODE_GIT_BASH_PATH is set at both User and Machine level
• The variable is also configured in VS Code settings.json via claudeCode.environmentVariables and terminal.integrated.env.windows
• claude works perfectly from Git Bash terminal

Expected: Extension panel should detect Git Bash and work normally.

Related issues: #25599, #13184, #12022, #8637

What Should Happen?

The Claude Code extension panel should detect Git Bash automatically when CLAUDE_CODE_GIT_BASH_PATH is set as a system environment variable, and launch normally without showing the git-bash error.

Error Messages/Logs

Error: Claude Code on Windows requires git-bash (https://git-scm.com/downloads/win). If installed but not in PATH, set environment variable pointing to your bash.exe, similar to: CLAUDE_CODE_GIT_BASH_PATH=C:\Program Files\Git\bin\bash.exe
View output logs · Troubleshooting resources

Steps to Reproduce

1. Install Git for Windows (Git Bash) on Windows 10/11
2. Install Claude Code VS Code extension (v2.1.68 or 2.1.69)
3. Set system environment variable: CLAUDE_CODE_GIT_BASH_PATH=C:\Program Files\Git\bin\bash.exe (both User and Machine level)
4. Add to VS Code settings.json:

• claudeCode.environmentVariables with CLAUDE_CODE_GIT_BASH_PATH
• terminal.integrated.env.windows with CLAUDE_CODE_GIT_BASH_PATH

1. Restart VS Code completely
2. Open Claude Code panel

Result: Error "Claude Code on Windows requires git-bash" persists despite correct configuration.
Note: claude works perfectly when run from Git Bash terminal inside VS Code.

Related issues: #25599, #13184, #12022, #8674

Claude Model

None

Is this a regression?

Yes, this worked in a previous version

Last Working Version

Yes - worked in version 1.0.126 according to other reports

Claude Code Version

2.1.69

Platform

Anthropic API

Operating System

Windows

Terminal/Shell

Other

Additional Information

_No response_