VS Code: bypass permissions mode resets to edit on extension reload

What happens

When I set the permission mode to bypass permissions in the VS Code extension, it switches back to edit mode on its own. This happens when the extension host restarts or the window reloads.

What I expected

The mode should stay on bypass permissions since that's what my settings say to do.

My setup

My global settings file (~/.claude/settings.json) already has the right config:

{
  "permissions": {
    "defaultMode": "bypassPermissions"
  },
  "skipDangerousModePermissionPrompt": true
}

Even with both of these set, the extension keeps falling back to edit mode. I have to manually switch it back every time.

Steps to see this

1. Set defaultMode to bypassPermissions in ~/.claude/settings.json
2. Open a project in VS Code
3. Start a Claude Code session — it correctly starts in bypass mode
4. Wait for the extension host to restart (or reload the window)
5. The mode is now back to edit instead of bypass

What I think is going on

It seems like the extension reads the setting on first load but doesn't keep it when it restarts. The session-level mode gets lost and the extension doesn't re-read the config to set it again.

Environment

• macOS (Darwin 25.2.0)
• VS Code with Claude Code extension
• Claude Code using Opus model