[BUG] Claude VSCode extension: on every update I need to set the default model again

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?

I'm on windows 11, latest version of vscode. I'm using claude caude andd vscode extention
Every time I update the extension i need to set the default model again

Also I set the default model in terminal, i expect the extension to use the same default model i used in terminal, it doesn't.

What Should Happen?

The default model should stay as is, also if you want to default back to something, don't default back to sonnet, default to your best available model in the current subscription

Error Messages/Logs

Steps to Reproduce

• download claude extension for vscaude
• setup a default model
• update the vscode extension
• the default model is now different

Claude Model

None

Is this a regression?

No, this never worked

Last Working Version

_No response_

Claude Code Version

2.1.77

Platform

Other

Operating System

Windows

Terminal/Shell

PowerShell

Additional Information

_No response_