Desktop App: Claude Code crashes with exit code 1 - SDK flag incompatibility (broken for 1+ week)

Bug Description

Claude Code in the Desktop App crashes immediately with exit code 1 when starting any local session. This has been broken for over a week (since ~March 22, 2026). The CLI works perfectly fine.

Root Cause

The Desktop App's SDK layer passes flags to the embedded Claude Code binary that it doesn't recognize. The binary exits immediately.

Evidence

Logs (from ~/Library/Logs/Claude/main.log):

[info] [CCD] Passing 1 plugin(s) to SDK (skills: 1, remote: 0, local: 0)
[info] Using Claude Code binary at: .../claude-code/2.1.87/claude.app/Contents/MacOS/claude
[error] Session local_... query error: Claude Code process exited with code 1
[info] [CCD CycleHealth] unhealthy cycle ... (0s, hadFirstResponse=false, reason=no_response)

Direct binary testing confirms the issue:

# Works fine:
claude -p "hi" --output-format json               # ✅
claude --plugin-dir <path> -p "hi"                 # ✅

# Flags the Desktop App seems to use:
claude --plugins <path> -p "hi"                    # ❌ error: unknown option '--plugins'
claude --sdk-metadata '{}' -p "hi"                 # ❌ error: unknown option '--sdk-metadata'

# Desktop App invocation:                          # ❌ exit code 1

Versions Tested

| Component | Version | Status |
|-----------|---------|--------|
| Desktop App | 1.1.8986 | ❌ Broken |
| Desktop App | 1.1.9493 | ❌ Broken |
| Embedded Claude Code | 2.1.78 | ❌ Crashes via Desktop |
| Embedded Claude Code | 2.1.87 | ❌ Crashes via Desktop |
| CLI Claude Code | 2.1.84 | ✅ Works fine |

Steps to Reproduce

1. Open Claude Desktop App (1.1.9493)
2. Open any local folder (e.g., create a test folder on Desktop)
3. Send any message
4. Claude Code spinner appears briefly then disappears — no response

What I've Tried

• Reinstalled Desktop App (multiple times via brew reinstall --cask claude)
• Deleted all caches (claude-code/, claude-code-vm/, claude-code-sessions/)
• Reset bridge-state.json
• Deleted local-agent-mode-sessions/
• Deleted Session Storage/
• Removed skills plugin directory
• Clean binary re-download (server always delivers same version)
• Updated Desktop App from 1.1.8986 → 1.1.9493
• Contacted Anthropic support (received only generic troubleshooting steps)

Nothing fixes it because the issue is in how the Desktop App invokes the embedded binary.

Environment

• Platform: macOS arm64 (Darwin 25.2.0)
• Subscription: Max plan
• Impact: Claude Code in Desktop App completely non-functional for 1+ week

Expected Behavior

Claude Code should respond to prompts in the Desktop App, same as it does via CLI.