File deleted after rejecting edit

Environment

• Platform (select one):
• [x] Anthropic API
• [ ] AWS Bedrock
• [ ] Google Vertex AI
• [ ] Other: <!-- specify -->
• Claude CLI version: 0.2.37
• Operating System: macOS 14.3
• Terminal: iTerm2

Bug Description

When declining a suggested code modification from Claude in a Python script, the entire file content gets deleted. After requesting Claude to recover the file, IntelliJ IDEA reports the file was loaded with the wrong encoding (UTF-8).

Steps to Reproduce

1. Use Claude to suggest a code change in a Python script.
2. Select “No” when asked to apply the change.
3. Observe that the file’s entire content is removed.
4. Request Claude to recover the file.
5. Open the file in IntelliJ IDEA and encounter the UTF-8 encoding error.

Expected Behavior

• Declining a suggested change should leave the file unaltered.
• Recovering the file should restore valid content without causing encoding issues.

Actual Behavior

• Selecting “No” causes the file to be completely wiped.
• After recovery, IntelliJ IDEA flags the file as having the wrong encoding (UTF-8), preventing normal editing.

Additional Context

• Attached screenshot shows the IntelliJ error message.
• Issue might be related to how Claude handles file contents when discarding or restoring changes.
• Copy/Paste of code to the new file is a workaround

<img width="1434" alt="Image" src="https://github.com/user-attachments/assets/31787878-7598-43b3-8edd-e6b2c7fb43a6" />