[BUG] Claude Code process exited with code 1

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?

I was in the middle of a session when the update toast popped. I finished my current work, and then ran the update. When I tried to resume the session after the update and restart, it crashed immediately.

Further testing proved that Using Claude Desktop / CoWork, in any attempt at a conversation (New or resume), the system returns: Claude Code process exited with code 1

What Should Happen?

Claude shouldn't crash

Error Messages/Logs

2026-04-16 14:20:22 [info] [FileSystemWatcher] Started watching C:[REDACTED]\Claude for session local_4d3a8979-2893-4076-bb44-a385c485d128
2026-04-16 14:20:23 [error] Session local_4d3a8979-2893-4076-bb44-a385c485d128 query error: Claude Code process exited with code 1
2026-04-16 14:20:23 [info] [Lifecycle] Session local_4d3a8979-2893-4076-bb44-a385c485d128: running → idle
2026-04-16 14:20:23 [info] [FileWatching] Stopping file watcher for session local_4d3a8979-2893-4076-bb44-a385c485d128
2026-04-16 14:20:23 [info] [FileSystemWatcher] Stopped watching for session local_4d3a8979-2893-4076-bb44-a385c485d128
2026-04-16 14:20:23 [info] [CycleHealth] Unhealthy cycle: {
  session_id: 'local_4d3a8979-2893-4076-bb44-a385c485d128',
  scheduled_task_id: null,
  space_id: 'a5fe8e04-51a7-43ee-8ed1-85f150165891',
  session_type: undefined,
  parent_session_id: undefined,
  host_loop_mode: false,
  vm_instance_id: '3030436c-2ac2-4e2b-aa6d-48acee9b6f61',
  model: 'claude-opus-4-7',
  cli_session_id: null,
  user_message_uuid: '403eaaf0-4fab-4327-a16f-e5d48469c322',
  cycle_health: 'unhealthy',
  had_first_response: false,
  seconds_to_outcome: 23,
  is_resume: true,
  unhealthy_reason: 'system_error',
  error_message: 'Claude Code process exited with code 1',
  error_category: 'process_crashed',
  transcript_size_bytes: undefined
}

Steps to Reproduce

Update to version Claude 1.3036.0 (cf521c) 2026-04-16T16:17:33.000Z
Try to use Claude Desktop

Claude Model

Not sure / Multiple models

Is this a regression?

Yes, this worked in a previous version

Last Working Version

_No response_

Claude Code Version

2.1.34 (Claude Code)

Platform

Anthropic API

Operating System

Windows

Terminal/Shell

Other

Additional Information

_No response_