[BUG] Cowork creates empty subfolder with same name when adding local folder to project Context

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?

When adding a local folder to a Cowork project's Context section, Cowork creates a new empty subfolder with the same name inside the selected folder, then attaches to that empty subfolder rather than the folder the user selected.

What Should Happen?

Cowork should attach to the folder the user selected, with no new folders created.

Error Messages/Logs

Steps to Reproduce

1. Open a Cowork project
2. In the Context section, click + to add a local folder
3. Select an existing folder (e.g. a folder named "Year 13" containing subfolders)
4. Observe that Cowork creates an empty subfolder at Year13/Year13/
5. The Context panel shows the newly created empty folder, not the selected one
6. User must dismiss and re-add the folder to attach to the correct directory

Claude Model

Not sure / Multiple models

Is this a regression?

I don't know

Last Working Version

_No response_

Claude Code Version

Claude 1.1062.0 (b81bcd) 2026-04-06T21:20:28.000Z

Platform

Anthropic API

Operating System

macOS

Terminal/Shell

Terminal.app (macOS)

Additional Information

<img width="770" height="371" alt="Image" src="https://github.com/user-attachments/assets/02018173-3db9-4569-bcd8-0d4607679408" />

<img width="391" height="434" alt="Image" src="https://github.com/user-attachments/assets/18348928-ffc0-4e96-ae38-41d46171db74" />