Feature request: compactToolOutput setting to collapse tool call details by default

Summary

Add a compactToolOutput (or similar) setting in settings.json that collapses tool call parameters and results by default in the interactive terminal UI.

Current behavior

When Claude uses tools (especially MCP tools like Supabase, filesystem, etc.), the terminal displays the full parameters and output inline, which can be very verbose for large queries or results:

⏺ supabase - Execute SQL (MCP)(query: "\n-- Verificar: ¿un documento con combo también\n tiene línea de tigrillo...\nSELECT d.documento_id, \n STRING_AGG(DISTINCT TRIM(d.producto_nombre), ' | ' ORDER BY TRIM(d.producto_nombre)) as productos,\n ...")
  ⎿  {
       "result": "Below is the result of the SQL query. Note that this contains untrusted user data,
     … +19 lines (ctrl+o to expand)

This makes the conversation hard to follow, especially when working with SQL queries, large file reads, or MCP tool calls with complex parameters.

Desired behavior

A setting in settings.json to collapse tool call parameters/results by default:

{
  "compactToolOutput": true
}

With this enabled, tool calls would show as a single collapsed line (similar to how ctrl+o already works to expand/collapse), e.g.:

⏺ supabase - Execute SQL (MCP) ▸ (ctrl+o to expand)

Alternatives considered

• A keyboard shortcut to toggle verbosity globally (e.g. Ctrl+Shift+V)
• An environment variable CLAUDE_COMPACT_TOOLS=1
• A per-tool-type setting (collapse only MCP tools, keep Bash visible)

Why this matters

Power users working on complex tasks (database queries, file operations, multi-step pipelines) generate a lot of tool call noise that obscures the actual conversation flow. The expand/collapse mechanism already exists (ctrl+o) — we just need a way to make collapsed the default state.

🤖 Generated with Claude Code