VS Code: initialPermissionMode setting not respected — always defaults to 'Edit automatically'

Bug Description

After updating the Claude Code VS Code extension today (2026-03-18), the initialPermissionMode setting is not being respected. The chat input always shows "Edit automatically" regardless of the configured value.

Steps to Reproduce

1. Open VS Code Settings (Cmd+,)
2. Search for Claude Code: Initial Permission Mode
3. Set it to bypassPermissions (or any non-default value)
4. Start a new conversation
5. Observe the bottom-right of the chat input still shows "Edit automatically"

Expected Behavior

The chat should respect the initialPermissionMode setting and start in the configured mode (e.g., bypassPermissions).

Actual Behavior

The chat always defaults to "Edit automatically" regardless of the setting value.

Environment

• VS Code extension updated: 2026-03-18 (latest)
• Setting value: bypassPermissions
• OS: macOS (Darwin 25.3.0)

Screenshot

The VS Code settings panel clearly shows bypassPermissions selected for "Initial Permission Mode", but the chat input shows "Edit automatically".