VS Code extension still prompts for file writes despite allowDangerouslySkipPermissions

Description

The VS Code extension prompts "Allow write to [filename]?" for file creation even though claudeCode.allowDangerouslySkipPermissions is set to true in VS Code settings and skipDangerousModePermissionPrompt: true is set in ~/.claude/settings.json.

Steps to Reproduce

1. Set "claudeCode.allowDangerouslySkipPermissions": true in VS Code User Settings
2. Set "skipDangerousModePermissionPrompt": true in ~/.claude/settings.json
3. Also have "Write(*)" in the permissions allow list
4. Ask Claude to create a new file (e.g., a new .md file)
5. Extension shows a permission prompt: "Allow write to [filename]?" with options: Yes / Yes, allow all edits this session / No

Expected Behavior

File should be created without prompting, since all three permission mechanisms are configured to allow it.

Actual Behavior

A modal prompt appears asking for permission on every new file creation.

Environment

• Machine: MacBook Pro (Mac14,9), Apple M2 Pro, 16 GB RAM
• macOS: 26.3.1 (Build 25D771280a)
• VS Code: 1.112.0 (arm64)
• Claude Code Extension: anthropic.claude-code@2.1.83
• Claude Code CLI: 2.1.83
• The setting has been in place for a long time — this is not a "needs reload" issue

Relevant Settings

VS Code User Settings:

"claudeCode.allowDangerouslySkipPermissions": true

~/.claude/settings.json:

{
  "permissions": {
    "allow": [
      "Bash(*)",
      "Edit(*)",
      "Write(*)",
      "Read(*)",
      "Glob(*)",
      "Grep(*)",
      "WebFetch(*)",
      "WebSearch"
    ]
  },
  "skipDangerousModePermissionPrompt": true
}

Screenshot

The prompt looks like this:

Allow write to utah-connect-scan.md?
1  Yes
2  Yes, allow all edits this session
3  No
Tell Claude what to do instead
Esc to cancel