[BUG] @mention path autocomplete does not traverse into nested git repositories

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 running Claude Code from a parent directory that contains nested git repositories (directories with their own .git), the @ mention path autocomplete does not index or traverse into those nested repos — even when using respectGitignore: false in settings and --add-dir to explicitly add those directories as workspaces.

What Should Happen?

Files inside nested git repositories (added via --add-dir or made visible via respectGitignore: false) should be indexed and available for @ mention path autocomplete when navigating their paths (e.g., @subproject.Api/src/Program.cs).

Error Messages/Logs

Steps to Reproduce

1. Run claude (or claude --add-dir ./subproject.Api --add-dir ./subproject.Web) from subscription/
2. In the chat, type @subproject.Api → the directory appears in autocomplete ✅
3. Type @subproject.Api/src/ → no results, autocomplete is blank ❌
4. Type @Program.cs (fuzzy file search) → no results ❌

Claude Model

None

Is this a regression?

No, this never worked

Last Working Version

_No response_

Claude Code Version

2.1.94

Platform

Anthropic API

Operating System

Other

Terminal/Shell

Other

Additional Information

Original Issue: https://github.com/anthropics/claude-code/issues/32924