bypass permissions mode still prompts for every edit on Windows

Bug Description

--dangerously-skip-permissions flag is recognized (status line shows "bypass permissions on") but does NOT actually bypass permission prompts. Every Edit tool call still triggers an interactive approval prompt.

Environment

• Claude Code: v2.1.81
• OS: Windows 11 Home 10.0.26200
• Shell: PowerShell (Windows Terminal) and Git Bash (Windsurf IDE terminal)
• Auth: Claude Max subscription

Steps to Reproduce

1. Launch: claude --dangerously-skip-permissions
2. Confirm status line shows "bypass permissions on"
3. Ask Claude to edit any file
4. Result: Still prompted with "Do you want to make this edit to [file]?" dialog (options: Yes / Yes allow for session / No)

Settings (~/.claude/settings.json)

{
  "permissions": {
    "allow": ["Bash", "Read(**)", "Write(**)", "Edit(**)", "Git"],
    "deny": ["Bash(rm -rf /)", "Read(./.env)", "Read(./.env.*)", "Read(./secrets/**)", "Read(**/*.pem)", "Read(**/*.key)", "Write(/etc/**)", "Write(/bin/**)", "Write(/usr/**)", "Write(C:\Windows\**)"],
    "defaultMode": "bypassPermissions"
  },
  "skipDangerousModePermissionPrompt": true
}

What was tried

• --dangerously-skip-permissions flag alone
• Setting defaultMode to both "dontAsk" and "bypassPermissions"
• skipDangerousModePermissionPrompt: true
• Happens in both standalone Windows Terminal and Windsurf IDE terminal
• No managed policies or settings.local.json overrides present

Expected Behavior

With --dangerously-skip-permissions and status line confirming "bypass permissions on", all tool calls should be auto-approved without prompts.

Actual Behavior

Every Edit/Write tool call prompts for approval, making multi-file operations extremely slow and defeating the purpose of the bypass flag.

Impact

This effectively blocks autonomous multi-terminal workflows (the primary reason for a Max subscription), as every file change requires manual approval despite bypass mode being active.