Auto-inject active terminal output as context in VS Code extension

Preflight Checklist

• [x] I have searched existing requests and this feature hasn't been requested yet
• [x] This is a single feature request (not multiple features)

Problem Statement

When debugging code, I have to manually type @terminal:name in every single prompt to reference terminal output. This creates constant
friction errors, test failures, and logs are visible right there in my terminal, but Claude can't see them unless I explicitly reference
them each time. The current workflow requires me to manually copy/paste or @mention the terminal on every prompt where terminal context is relevant.

Proposed Solution

A setting like claudeCode.autoInjectTerminal: true that automatically appends the active terminal's recent output as context on each prompt when enabled. The interface should show a small terminal indicator in the prompt bar when terminal context is being included, so the user
knows it's active.

Alternative Solutions

Currently I work around this by manually typing @terminal on every prompt. Cursor solves this by having ambient terminal awareness built
into its agent by default.

Priority

High - Significant impact on productivity

Feature Category

Configuration and settings

Use Case Example

_No response_

Additional Context

_No response_