[BUG] **Bug: VS Code Extension returns 'API Error: Rate limit reached' on every request despite active Pro subscription**

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?

The VS Code extension sidebar returns 'API Error: Rate limit reached' on every single message, even simple ones like 'hello'. The terminal CLI works perfectly fine with the same credentials. This started today (March 17, 2026) — it was working fine yesterday with no issues.

claude auth status output:

{
  "loggedIn": true,
  "authMethod": "claude.ai",
  "apiProvider": "firstParty",
  "email": "bobimarioandrei@gmail.com",
  "orgId": "98fc7237-a0cb-4e42-9946-858c194db0f3",
  "orgName": null,
  "subscriptionType": null
}

Note: subscriptionType shows null even though Pro subscription is active. Manually setting it to "pro" in .credentials.json does not fix the extension.

What Should Happen?

The VS Code extension sidebar should recognize the active Pro subscription and process messages normally, the same way the terminal CLI does with the same credentials. subscriptionType should not be null when a valid Pro subscription is active.

Error Messages/Logs

Steps to Reproduce

1. Have two Claude accounts on the same Windows machine (one Pro, one Max)
2. Switch to the Pro account in Claude Code
3. Open VS Code extension sidebar
4. Send any message → API Error: Rate limit reached
5. Same message in terminal works fine

Claude Model

Opus

Is this a regression?

I don't know

Last Working Version

_No response_

Claude Code Version

2.1.77

Platform

Anthropic API

Operating System

Windows

Terminal/Shell

Windows Terminal

Additional Information

• claude logout + claude login
• claude login --browser
• npm update -g @anthropic-ai/claude-code (updated to 2.1.77)
• Deleted C:\Users\Costi\.claude folder and re-logged in
• Manually set subscriptionType to "pro" in .credentials.json
• Full PC restart
• Checked billing — Pro subscription is active and payment is fine