[BUG] VS Code extension: model selection not activated on session start, first prompt triggers 1M context error until model is re-selected

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?

Steps to reproduce:

• Open VS Code with Claude Code extension v2.1.112
• Start a new session, model appears selected (checkmark visible)
• Submit any prompt
• Error: "Extra usage is required for 1M context"
• Workaround: Click the model again to re-select it, send any text (e.g. "go"), then the session works normally for the rest of the session.

Expected: Selected model should be active from the first prompt without requiring a re-selection.

Environment: Windows 11, VS Code, Claude Max subscription, 1M context extra usage already enabled at claude.ai/settings/usage. Using the Claude extension in VS Code, not the terminal.

What Should Happen?

Should work fine without having to re-select the model and send a dummy message to proceed.

Error Messages/Logs

API Error: Extra usage is required for 1M context · enable extra usage at claude.ai/settings/usage, or use --model to switch to standard context

Steps to Reproduce

Steps to reproduce: start new session, model appears selected, first real prompt errors, re-select + send anything fixes. Happens with all new conversation threads. Was happening a few weeks ago and then resolved on its own. Happening again.

Claude Model

None

Is this a regression?

Yes, this worked in a previous version

Last Working Version

_No response_

Claude Code Version

v2.1.112

Platform

Anthropic API

Operating System

Windows

Terminal/Shell

Other

Additional Information

_No response_