[BUG] managed-setting.json is bypassed when using Claude in VSCode combined with remote-ssh

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 using VSCode Claude plugin to edit remote files using remote-ssh, server managed-settings.json is not applied on remote host.

What seems to happen:

When user uses connects to a remote server using remote-ssh the claude plugin deploys a Claude binary on the remote host in users home folder:

~/.vscode-server/extensions/anthropic.claude-code-2.1.72-linux-x64/resources/native-binary/claude

This Claude binary is used to run Claude on remote host, but this instance does not adapt managed-settings.json. Instead it seems like default, or user settings are applied. It also does not seem to pick up /etc/claude-code/managed-settings.json if it is deployed on the remote host.

The result is that admins settings managed-settings.json are completely bypassed when a user uses Claude with files on a remote host.

What Should Happen?

Claude should always use managed-setting.json also in cases when Claude with VSCode remote-ssh on a remote host. It would also probably be good to have a a way to restrict using Claude with remote-ssh via managed-settings.json.

Error Messages/Logs

Steps to Reproduce

• Create and deploy managed-settings.json different from default settings
• Use remote-ssh to connect to a remote host in VScode
• Open Claude plugin and test which permissions apply.

Claude Model

Not sure / Multiple models

Is this a regression?

I don't know

Last Working Version

_No response_

Claude Code Version

2.1.72

Platform

Anthropic API

Operating System

macOS

Terminal/Shell

VS Code integrated terminal

Additional Information

_No response_