[BUG] Drag and drop folders into VS Code chat panel does not work (files work with Shift)

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?

Dragging a folder from Finder or VS Code file explorer into the Claude Code chat panel does not work. The drop zone does not highlight and the folder is silently ignored on drop.

File drag & drop works correctly when holding the Shift key — the file is converted into an @-reference in the input. However, the same workflow does not work for folders/directories.

Manually typing an @-reference to a folder works as expected.

What Should Happen?

Dragging a folder into the chat panel should highlight the drop zone (as it does for files) and insert an @-reference to the folder path on drop, consistent with file drag & drop behavior.

Steps to Reproduce

1. Open Claude Code in the VS Code extension (sidebar or tab view)
2. Drag a file from Finder or the VS Code file explorer into the chat input while holding Shift → works: drop zone highlights, file is added as @ reference ✅
3. Drag a folder from Finder or the VS Code file explorer into the chat input while holding Shift → does not work: drop zone does not highlight, nothing happens on drop ❌
4. Manually type @ and reference the same folder → works ✅

Is this a regression?

I don't know

Claude Code Version

2.1.85 (Claude Code)

Platform

Anthropic API

Operating System

macOS

Terminal/Shell

VS Code integrated terminal

How this differs from related issues

This is not a duplicate of the existing drag & drop issues:

• #25128 reported that drag & drop was completely broken for all items (files and folders) in the chat panel. That appears to have been partially fixed since then — file drag & drop now works when holding Shift. However, folder drag & drop remains broken. This issue tracks the remaining gap.
• #41338 is a general feature request for drag & drop support in the VS Code extension, not a specific bug report about the file-vs-folder discrepancy.
• #42206 is about folder drag & drop in the VS Code terminal (CLI mode) on Linux, not the chat panel webview.

The key distinction here: file drag & drop works, folder drag & drop does not. This suggests the drop handler filters by item type and either explicitly excludes directories or only accepts entries with a file MIME type / file extension, causing directories to be silently rejected.

Additional Information

Related issues:

• #25128 — previously tracked broad drag & drop failures in the chat panel (partially fixed)
• #41338 — general feature request for drag & drop in VS Code extension
• #42206 — folder drag & drop regression in VS Code terminal (Linux)