initialPermissionMode: bypassPermissions does not persist across VS Code restarts

Description

claudeCode.initialPermissionMode set to bypassPermissions in VS Code settings does not persist across VS Code restarts (window reload or full application restart). Every time VS Code opens, the permission mode reverts to "Ask before edits."

Steps to Reproduce

1. Set "claudeCode.initialPermissionMode": "bypassPermissions" in VS Code User settings
2. Set "claudeCode.allowDangerouslySkipPermissions": true in VS Code User settings
3. Also set "permissions": {"defaultMode": "bypassPermissions"} in:

• ~/.claude/settings.json (global Claude config)
• .claude/settings.local.json (project-level Claude config)
• .vscode/settings.json (workspace-level VS Code config)

1. Manually switch to bypass permissions mode in the session — works fine
2. Close and reopen VS Code (or Reload Window)
3. Permission mode has reverted to "Ask before edits"

Expected Behavior

Permission mode should persist as bypassPermissions across restarts when configured in settings.

Environment

• VS Code Extension: anthropic.claude-code 2.1.101 (win32-x64)
• Claude CLI: 2.1.104
• OS: Windows 11 Pro 10.0.26200
• Settings verified in four locations (user, global, project, workspace)

Notes

Setting bypass permissions manually each session works fine — only persistence across restarts is broken. This appears to be a state management issue where the extension ignores the configured initialPermissionMode on startup.