[BUG] Permissions System Completely Non-Functional in Claude Desktop Code Tab (Windows)

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?

The permissions system in the Claude Desktop Code tab is completely non-functional. Permission dialogs appear for every command regardless of settings, and /permissions returns a blank screen. The standalone CLI works correctly with identical config files.

• Permission dialog appears for every command, including simple ones like ls D:/personal/PreludeDemo
• /permissions slash command returns a completely blank screen
• Bypass permissions mode has no effect
• Introducing deliberate JSON syntax errors into settings.json produces no error, suggesting the file may be read but the permissions subsystem is not initializing

What Should Happen?

• No permission dialogs should appear
• /permissions should display the loaded permission rules
• Bypass permissions mode should unconditionally skip all prompts

Error Messages/Logs

Steps to Reproduce

1. Install Claude Desktop on Windows
2. Configure ~/.claude/settings.json with allow rules (e.g. Bash(*))
3. Configure .claude/settings.local.json in project root with allow rules
4. Open the Code tab in Claude Desktop
5. Set permission mode to Bypass permissions
6. Ask Claude to run any bash command

Claude Model

Sonnet (default)

Is this a regression?

Yes, this worked in a previous version

Last Working Version

2.1.81

Claude Code Version

2.1.81

Platform

Anthropic API

Operating System

Windows

Terminal/Shell

Other

Additional Information

Additional Findings

• %USERPROFILE% and %APPDATA% resolve correctly inside the Desktop Code tab (no sandbox path virtualization)
• The app can read ~/.claude/settings.json (verified via cat command in session)
• The standalone CLI at C:\Users\admin\.local\bin\claude.exe reads the same config files correctly and /permissions works as expected there
• The following errors appear on startup:

[ERROR:net\disk_cache\cache_util_win.cc:25] Unable to move the cache: Access is denied. (0x5)
[ERROR:net\disk_cache\disk_cache.cc:236] Unable to create cache

• Multiple Node.js deprecation warnings suggest the bundled Node.js version may be outdated

Config Files

~/.claude/settings.json:

{
  "autoUpdatesChannel": "latest",
  "permissions": {
    "allow": [
      "Bash(*)"
    ]
  }
}

.claude/settings.local.json (project root):

{
  "permissions": {
    "allow": [
      "Bash(*)"
    ]
  }
}