[BUG] Claude VSCode Extension not loading with Overleaf Workshop extension

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?

What's Wrong?

When VS Code has a virtual filesystem workspace open (specifically via the Overleaf Workshop extension, which mounts a remote Overleaf project via a non-file:// URI scheme), the Claude Code extension activates and starts its MCP server but then produces no further log output and is completely unresponsive. No panel content loads, no authentication flow triggers, and no errors are surfaced.
Environment

Platform: macOS
VS Code Version Block

Version: 1.111.0 (Universal)
Commit: ce099c1ed25d9eb3076c11e4a280f3eb52b4fbeb
Date: 2026-03-06T23:06:10Z
Electron: 39.6.0
ElectronBuildId: 13330601
Chromium: 142.0.7444.265
Node.js: 22.22.0
V8: 14.2.231.22-electron.0
OS: Darwin arm64 25.3.0

Claude Code extension version: 2.1.76
Conflicting extension: Overleaf Workshop (opens a virtual filesystem workspace)

What Should Happen?

I should be able to use Claude Code in this workspace.

Error Messages/Logs

2026-03-16 16:55:35.595 [info] Claude code extension is now active?
2026-03-16 16:55:35.595 [info] MCP Server running on port 14344 (localhost only)
2026-03-16 16:56:59.123 [info] Claude code extension is now active?
2026-03-16 16:56:59.123 [info] MCP Server running on port 34899 (localhost only)
2026-03-16 17:21:52.067 [info] Claude code extension is now active?
2026-03-16 17:21:52.067 [info] MCP Server running on port 35124 (localhost only)
2026-03-16 17:24:59.167 [info] Claude code extension is now active?
2026-03-16 17:24:59.167 [info] MCP Server running on port 22032 (localhost only)
2026-03-16 17:42:25.154 [info] Claude code extension is now active?
2026-03-16 17:42:25.154 [info] MCP Server running on port 24212 (localhost only)
2026-03-16 18:03:25.426 [info] Claude code extension is now active?
2026-03-16 18:03:25.426 [info] MCP Server running on port 31510 (localhost only)
2026-03-16 18:03:36.612 [info] Claude code extension is now active?
2026-03-16 18:03:36.612 [info] MCP Server running on port 38432 (localhost only)
2026-03-16 18:04:42.925 [info] Claude code extension is now active?
2026-03-16 18:04:42.925 [info] MCP Server running on port 33398 (localhost only)
2026-03-16 18:10:06.550 [info] Claude code extension is now active?
2026-03-16 18:10:06.550 [info] MCP Server running on port 62237 (localhost only)

Steps to Reproduce

Install the Overleaf Workshop VS Code extension
Open a remote Overleaf project (this mounts a virtual filesystem — the workspace URI is not file://)
Open the Claude Code panel (via the Spark icon or status bar)
Observe that the panel does not load and Claude Code is unresponsive

Claude Model

Other

Is this a regression?

I don't know

Last Working Version

_No response_

Claude Code Version

2.1.76

Platform

Anthropic API

Operating System

macOS

Terminal/Shell

VS Code integrated terminal

Additional Information

<img width="406" height="68" alt="Image" src="https://github.com/user-attachments/assets/9105ca80-c4ac-4b83-91c5-27c841256c81" />