Desktop app: Auto mode and Bypass permissions greyed out despite account toggles enabled

Environment

• Claude Code Desktop App (macOS, Sequoia 15.3.2)
• Team plan, admin account
• Claude Opus 4.6

Bug

The mode selector dropdown in the desktop app shows Auto mode and Bypass permissions as greyed out / disabled, even after:

1. Enabling "Allow auto permissions mode" on claude.ai account settings
2. Enabling "Allow bypass permissions mode" on claude.ai account settings
3. Setting defaultMode to auto in both ~/.claude/settings.json and .claude/settings.local.json
4. Uploading managed settings via claude.ai admin
5. Multiple full app restarts (quit and relaunch)

The tooltip on the greyed-out options says "enable it in Claude Code settings" but the settings ARE enabled. The app points you to the toggles, you flip them, restart, and the dropdown is still greyed out.

What works

• "Auto accept edits" is selectable (but only covers file writes, not Bash)
• Simple Bash commands occasionally pass without prompting (inconsistent)

What does not work

• Auto mode: greyed out in dropdown
• Bypass permissions: greyed out in dropdown
• bypassPermissions true in settings.json: completely ignored
• defaultMode auto in settings.json: completely ignored
• Managed settings via claude.ai admin: says "only applies to CLI and IDE"
• Background agents: cannot use Bash at all, no way to present permission prompt to user

Impact

• Every database query requires a manual permission click
• Background agents are completely non-functional (filed separately as #38859)
• The allow list patterns in settings do not match commands that should be pre-approved
• Workflow that should be zero-click requires 40+ permission clicks per session

Related issues

• #38859 Agents cannot use Bash (same root cause)
• #38662 bypassPermissions broken in desktop app
• #34095 #32402 #27203 Earlier reports of similar issues (all closed)

Steps to reproduce

1. Open Claude Code desktop app on macOS
2. Go to claude.ai admin settings, enable both auto and bypass toggles
3. Restart the app
4. Click the mode selector dropdown next to the send button
5. Observe: Auto mode and Bypass permissions are greyed out