[Bug] Desktop freezes/lag during Claude Code output on high refresh rate + high resolution displays

Preflight Checklist

• [x] I have searched existing issues and this hasn't been reported yet
• [x] This is a single bug report
• [x] I am using the latest version of Claude Code

What's Wrong?

When Claude Code is outputting text (especially during tool execution or streaming responses), the entire desktop becomes extremely laggy/unresponsive. This is especially noticeable on high refresh rate displays.

Environment

• Version: 2.1.77
• OS: Windows 11 Pro (Build 26200)
• Install: winget (Anthropic.ClaudeCode)
• Display:
• Primary: Intel Arc A770 GPU, 3840x2160 (4K) @ 165Hz
• Secondary: Intel UHD Graphics 770, 1920x1080 @ 165Hz
• Terminal: Windows Terminal (latest)
• Shell: PowerShell 7 / cmd.exe

Observed Behavior

During Claude Code output (tool execution, streaming responses), the entire desktop experiences severe lag:

• Mouse cursor stutters
• Other applications become unresponsive
• Keyboard input is delayed
• Audio/video playback may stutter

The issue is much more pronounced on the 4K@165Hz display.

Expected Behavior

Claude Code output should not affect overall system responsiveness. The desktop should remain fluid even during heavy terminal output.

Steps to Reproduce

1. Start Claude Code session
2. Execute any command that produces significant output (e.g., running a script, reading multiple files, tool execution with verbose output)
3. Observe desktop responsiveness during output

Additional Information

The issue seems related to how Claude Code handles terminal rendering - it appears to be a full-screen redraw architecture that causes blocking and high CPU/GPU usage during output.