[BUG] Server outage caused immediate and total lockout of Claude Code in VS Code

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?

At approximately 5pm GMT on 6 Apr 26, Claude suffered a major outage which led to 500 errors from some of its servers including authentication handlers. The outage was reported by Claude Status and led to several bug reports being raised on this site.

This bug report is not for the server outage. The bug is that this outage instantly blocked a complex in-progress Claude Code session in VS Code on a local machine, without any warning.

This was not only extremely disruptive but also prevented me from even seeing the text of the session while the outage was in progress, because the modal login window (presumably caused because Claude Code could not connect to the auth server) caused the session to be hidden and unclickable.

A server outage should never instantly block a local session. This was an absolutely terrible user experience.

What Should Happen?

A server outage (which will inevitably happen from time to time) should be handled gracefully. Desktop users, such as those using the VS Code 'Claude Code' extension, should see no disruption during an outage, assuming that their subscription has been verified by the extension or app within the previous (say) 24 hours.

Error Messages/Logs

Steps to Reproduce

Start a Claude Code session in VS Code, then trigger a Claude server outage.

Claude Model

Opus

Is this a regression?

I don't know

Last Working Version

_No response_

Claude Code Version

2.1.92

Platform

Anthropic API

Operating System

Windows

Terminal/Shell

VS Code integrated terminal

Additional Information

_No response_