Permission mode resets from 'Bypass permissions' to 'Edit automatically' mid-session

Description

The permission mode spontaneously changes from "Bypass permissions" to "Edit automatically" during a session without user interaction. This causes Write tool calls to prompt for permission when they should be auto-approved.

Steps to reproduce

1. Open Claude Code in VSCode extension
2. Set permission mode to "Bypass permissions" via the mode selector
3. Use Claude normally (Edit, Write, Bash tool calls)
4. Observe the mode selector — it changes to "Edit automatically" mid-session

This happens during normal tool use (Edit, Write). No specific trigger identified — it appears to happen intermittently after a few tool calls.

Expected behavior

The permission mode should stay on "Bypass permissions" for the entire session unless the user explicitly changes it.

Actual behavior

The mode resets to "Edit automatically", which causes:

• Write tool calls to prompt for permission ("Allow write to file.md?")
• Breaks autonomous workflows (slash commands / skills that expect unattended operation)

Workaround

Setting "defaultMode": "bypassPermissions" in .claude/settings.local.json under the permissions key causes the mode to reset to Bypass instead of Edit Automatically. This mitigates but doesn't prevent the reset.

{
  "permissions": {
    "defaultMode": "bypassPermissions"
  }
}

Environment

• Claude Code VSCode extension (started ~2 versions ago)
• macOS (Darwin 24.5.0)
• The issue occurs in both normal sessions and when using EnterWorktree

Impact

High for users running autonomous skills/workflows that depend on Bypass mode for unattended operation. Each mode reset interrupts the workflow with permission prompts.