[BUG] API Error: Rate limit reached despite 22% session usage on Pro plan - VS Code extension

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?

What's Wrong?

Claude Code returns "API Error: Rate limit reached" on every request despite having 22% session usage and 25% weekly usage available. The error persists even after a full logout/login cycle.

Steps to Reproduce

1. Open Claude Code extension in VS Code
2. Authenticate with Claude AI (Pro plan)
3. Type any message, including simple ones like "explain main.py"
4. Receive "API Error: Rate limit reached" immediately

Expected Behavior
Requests should succeed. Session usage is at 22% and weekly usage at 25% — well within plan limits.

Actual Behavior
Every request immediately returns "API Error: Rate limit reached" regardless of message complexity.

What I tried

• Waited for the session window to reset
• Signed out and signed back in via Claude: Sign out / Claude: Sign in in VS Code
• After re-login, plan correctly shows as "Claude Pro" and Auth method as "Claude AI"
• Error persists after all of the above

Environment

• OS: macOS Tahoe 26.3.1(a)
• VS Code: 1.113.0
• Claude Code: latest (VS Code extension)
• Plan: Claude Pro
• Auth method: Claude AI

Usage at time of error

• Session (5hr): 22% — Resets in 4h
• Weekly (7 day): 25% — Resets in 3d

Related issues
This appears to match the pattern described in #29579, #33094, and #39581 where the server-side rate limiter enters a stuck state for specific accounts.

What Should Happen?

Requests should be processed normally. With 22% session usage
and 25% weekly usage remaining, the Pro plan allocation is far
from exhausted and no rate limiting should occur.

Error Messages/Logs

API Error: Rate limit reached

Steps to Reproduce

1. Open Claude Code extension in VS Code
2. Authenticate with Claude AI (Pro plan)
3. Type any message, including simple ones like "explain main.py"
4. Receive "API Error: Rate limit reached" immediately

Claude Model

None

Is this a regression?

I don't know

Last Working Version

_No response_

Claude Code Version

latest (VS Code extension)

Platform

Anthropic API

Operating System

macOS

Terminal/Shell

VS Code integrated terminal

Additional Information

_No response_