[BUG] Endless prompts for permission

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?

Claude now prompts for permission to access every file, which makes it useless. Even if I select "allow and don't ask again" it keeps asking. I'm running it with claude --dangerously-skip-permissions which used to disable this horrible behavior, but now this seems to do nothing.

Claude itself recommended adding "defaultMode": "bypassPermissions" to the permissions block of ~/.claude/settings.json but after a restart that still did nothing.

I'm using the current release which is 2.1.107.

What Should Happen?

If I disable permissions, Claude should not ask for permission to edit every single file.

Error Messages/Logs

Steps to Reproduce

1. Launch Claude with claude --dangerously-skip-permissions and when it asks to trust the cwd, say yes
2. have it do some task
3. ask it to save a log of its actions to ./.claude/log.txt
4. notice it incorrectly asks you for permission to write to ./.claude/log.txt

Claude Model

Sonnet (default)

Is this a regression?

Yes, this worked in a previous version

Last Working Version

_No response_

Claude Code Version

2.1.107

Platform

Anthropic API

Operating System

Ubuntu/Debian Linux

Terminal/Shell

Xterm

Additional Information

_No response_