API Error 400 'Could not process image' kills entire session with no recovery

Description

When Claude Code attempts to read files that contain or are detected as images, and the API returns a 400 error ("Could not process image"), the entire session becomes unresponsive. No further interactions are possible and the user must start a new conversation.

Steps to Reproduce

1. Have Claude Code read multiple files (e.g. scraped website content that includes image files)
2. One of the files triggers the API error: API Error: 400 {"type":"error","error":{"type":"invalid_request_error","message":"Could not process image"}}
3. After this error, Claude Code stops responding entirely

Expected Behavior

• Claude Code should gracefully handle the error, skip the problematic file, and continue working
• The session should not become permanently broken from a single file read failure

Actual Behavior

• The 400 error poisons the conversation context
• Claude Code becomes completely unresponsive after the error
• The only workaround is to start a new session

Screenshot

The error appears inline after a "Read 5 files" operation:

Read 5 files (ctrl+o to expand)
└  API Error: 400 {"type":"error","error":{"type":"invalid_request_error","message":"Could not process image"},"request_id":"req_011Ca1rBxMnHTSLC7yCvHWk3"}

9 tasks (0 done, 1 in progress, 8 open)

Environment

• macOS (Darwin 25.2.0)
• Claude Code CLI
• Model: claude-opus-4-6

Impact

This is particularly disruptive when working with scraped website content or any directory that mixes text and binary/image files. A single unprocessable image file kills an entire work session, potentially losing significant context and progress.