[BUG] @ file picker does not show untracked files in git repositories (regression)

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 @ file picker dropdown shows directories and the plan option but no files when files are untracked in a git repository. Previously, untracked files were visible in the @ file picker. Only upon running git add on files, they appear in the picker as expected.
This is a regression — the @ picker used to show all files in the project directory regardless of git tracking status. Now it appears to rely exclusively on git ls-files, which excludes untracked files.

• Note: I haven't upgrade any version of Claude Code, it failed to execute somehow, no idea.
• Related: #26464

What Should Happen?

The @ file picker should show all files in the project directory, including untracked files, as it did in earlier versions.

Error Messages/Logs

Haven't seen any logs via live debugging

1. # Trace what Claude Code is doing when you type @
strace -f -e trace=read,write,openat -p $(pgrep -f claude) 2>/tmp/claude-strace.log &

2. # Then type @ in Claude Code, wait a few seconds, then:
kill %1
grep -i "rg\|ripgrep\|git.*ls-files\|file" /tmp/claude-strace.log | head -40

3. Nothing show up

Steps to Reproduce

1. Create a git repo with untracked files:

bash

mkdir /tmp/test-repo && cd /tmp/test-repo
git init
echo "hello" > test.txt
echo "world" > another.txt
# Do NOT git add or commit

1. Start Claude Code: claude
2. Type @ — dropdown shows directories only, no files
3. Type @test.txt — no autocomplete suggestion
4. Exit Claude Code
5. Run git add . and git commit -m "track files"
6. Start Claude Code again: claude
7. Type @ — files now appear in the dropdown

Claude Model

Sonnet (default)

Is this a regression?

I don't know

Last Working Version

_No response_

Claude Code Version

2.1.85 (native install)

Platform

Anthropic API

Operating System

Ubuntu/Debian Linux

Terminal/Shell

Xterm

Additional Information

_No response_