[VSCode Extension] File edit diffs open in new editor tab instead of inline in chat panel

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?

Since a recent update (around end of March / early April 2026), file edit approvals not only appear inline in the Claude Code chat panel. Instead, each edit opens a new diff editor tab in VS Code, which requires switching windows to approve or reject changes.

Previous behavior: Edit diffs were shown directly within the chat panel. Approve/reject buttons were visible inline without leaving the chat.

Current behavior: Every time Claude proposes a file edit, a new VS Code diff editor tab is opened automatically.

Expected behavior: Diff approval should stay within the chat panel as before. The new-tab behavior is disruptive to the review workflow — the user has to switch back and forth between the chat and the editor tab for every single change.

Environment:

OS: Windows 10 Pro (10.0.19045)
VS Code version: 1.112.0
Claude Code extension version: 2.1.89

No workaround found — acceptEdits mode skips approval entirely, which is not acceptable for controlled code review.

What Should Happen?

Diff approval should stay within the chat panel as before. The new-tab behavior is disruptive to the review workflow — the user has to switch back and forth between the chat and the editor tab for every single change.

Error Messages/Logs

Steps to Reproduce

Open any project in VS Code with the Claude Code extension
Ask Claude to make any file edit (e.g. "change X to Y in file Z")
Claude proposes the edit
Observe: a new diff editor tab opens automatically in VS Code
Expected: Approve/reject UI appears inline in the Claude Code chat panel
Actual: A new editor tab opens with the diff, requiring the user to switch away from the chat panel

Claude Model

Not sure / Multiple models

Is this a regression?

Yes, this worked in a previous version

Last Working Version

_No response_

Claude Code Version

2.1.89

Platform

Anthropic API

Operating System

Windows

Terminal/Shell

VS Code integrated terminal

Additional Information

_No response_