CoworkVMService crashes with ERROR_INVALID_FUNCTION (1066) on Windows 11 Pro 25H2 — workspace setup hangs indefinitely

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?

Cowork workspace setup hangs at ~75% ("Setting up Claude's workspace") and never completes. CoworkVMService crashes immediately on every start with ERROR_INVALID_FUNCTION (exit code 1066).

This is Claude Desktop Cowork, not Claude Code CLI.

Windows Event Log (Event ID 7024):
The Claude service terminated with the following service-specific error: Incorrect function.

Network state:
Get-HnsNetwork: No cowork-vm-nat network found
Get-NetNat: Empty

Service crashes before reaching networking setup — no NAT or virtual networks are ever created.

What Should Happen?

Cowork workspace should start successfully on Windows 11 Pro 25H2 with all Hyper-V features enabled.

Error Messages/Logs

Windows Event ID 7024: The Claude service terminated with the following service-specific error: Incorrect function.

cowork_vm_node.log:
[info] [cleanupVMBundleIfUnsupported] yukonSilver not supported (status=unsupported)
[info] rootfs.vhdx not found, downloading...
[error] [logout] Failed to stop VM on logout: VM service not running. The service failed to start.

Network:
Get-HnsNetwork: No cowork-vm-nat network found
Get-NetNat: Empty
sc.exe delete CoworkVMService: Access is denied

Steps to Reproduce

1. Install Claude Desktop v1.1.7714.0 from claude.com/download (Windows x64)
2. Open Cowork tab
3. Click "Get started"
4. Workspace setup hangs at ~75% indefinitely
5. CoworkVMService crashes in a loop (START_PENDING → crash → restart)

Claude Model

None

Is this a regression?

No, this never worked

Last Working Version

_No response_

Claude Code Version

N/A — this is Claude Desktop Cowork 1.1.7714.0 (MSIX), not Claude Code CLI

Platform

Anthropic API

Operating System

Windows

Terminal/Shell

PowerShell

Additional Information

• Windows 11 Pro 25H2 (Build 26200.8037)
• Claude Desktop 1.1.7714.0 (MSIX)
• All Hyper-V features enabled (full Hyper-V, Virtual Machine Platform, Windows Hypervisor Platform)
• Full uninstall + registry cleanup + reinstall did not help
• VPN/proxy disabled, multiple networks tested
• Support ticket filed: Conversation ID 215473584352604
• Related issues: #37412, #37399, #37838

This is the same yukonSilver platform detection bug affecting multiple Windows users. Cowork has never worked on this system despite all virtualization requirements being met.