[BUG] VS Code extension resets subscriptionType to null for Team accounts → “API Error: Rate limit reached”

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?

After our organization migrated from Claude API billing to a Claude Team subscription, the Claude Code CLI works correctly, but the VS Code Claude Code extension incorrectly falls back to API mode and reports:

API Error: Rate limit reached

The extension login appears to overwrite the correct authentication state and removes the subscription metadata.

When using a Claude Team subscription, logging in through the VS Code Claude Code extension overwrites the correct auth state and sets:

subscriptionType: null

This causes the extension to behave as if it is using Claude API billing and requests fail with:

API Error: Rate limit reached

The CLI works correctly until the extension login flow runs.

What Should Happen?

claude should work with vscode after authentication

Error Messages/Logs

Steps to Reproduce

Login via CLI:

claude auth login

Confirm correct state:

claude auth status

Shows:

subscriptionType: "team"

Login via the VS Code Claude extension.

Run again:

claude auth status

Claude Model

None

Is this a regression?

Yes, this worked in a previous version

Last Working Version

_No response_

Claude Code Version

2.1.76 (Claude Code)

Platform

Anthropic API

Operating System

macOS

Terminal/Shell

iTerm2

Additional Information

_No response_