VS Code extension: Edit/Write tools prompt for approval despite allow rules and "auto accept edits" mode

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?

• Edit(/Users/<username>/) and Write(/Users/<username>/) are in ~/.claude/settings.json allow list
• VS Code permission mode is set to "edit automatically"
• Edit and Write tool calls still show the diff view and require manual approval
• Bash commands with Bash(*) in the allow list run without prompting (as expected)
• Tested with no settings.local.json present
• macOS, Claude Code VS Code extension

What Should Happen?

Expected behavior: Edit and Write tool calls matching an allow rule (e.g., Edit(/Users/<username>/**)) should execute without prompting, the same way Bash tool calls matching Bash(*) do. The "edit automatically" permission mode should reinforce this, not be overridden by a separate diff approval flow.

Error Messages/Logs

Steps to Reproduce

Steps to reproduce:

1. Add Edit(/Users/<username>/) and Write(/Users/<username>/) to ~/.claude/settings.json allow list
2. Set VS Code permission mode to "edit automatically" (bottom of chat input)
3. Ensure no settings.local.json exists that could shadow the rules
4. Ask Claude to edit any file under the home directory (e.g., "add a comment line to ~/.claude/skills/any-file.md")
5. Observe: Edit tool shows diff view and waits for manual approval
6. For comparison, ask Claude to do the same edit via Bash sed. Observe: runs without prompting

Claude Model

None

Is this a regression?

Yes, this worked in a previous version

Last Working Version

_No response_

Claude Code Version

2.1.78 (Claude Code)

Platform

Anthropic API

Operating System

macOS

Terminal/Shell

VS Code integrated terminal

Additional Information

_No response_