[BUG] Markdown file links with spaces in path are not clickable in VSCode extension

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?

Description:
When Claude outputs a markdown link [text](path) referencing a file whose path contains a space (e.g. Database/dbo/Stored Procedures/dbo.GetFields.sql), the link is not clickable in the chat panel.

Tried (all fail to produce a clickable link):

Unescaped space: [x](folder/Stored Procedures/file.sql)
URL-encoded: [x](folder/Stored%20Procedures/file.sql)
CommonMark angle-wrapped: [x](<folder/Stored Procedures/file.sql>)
Backslash-escaped space: [x](folder/Stored\ Procedures/file.sql)
file:/// absolute URI with %20
vscode://file/... URI with %20

• for space

Paths without spaces work correctly. The system prompt instructs the model to emit relative-path markdown links, which breaks for any workspace containing folders with spaces (very common on Windows, e.g. SSDT's Stored Procedures, Unit Tests).

What Should Happen?

Expected: Links with spaces (or a documented encoding of them) should resolve and open the file in the editor.

Error Messages/Logs

Steps to Reproduce

Ask Claude to show a link to any file in project with spaces in the path

Claude Model

None

Is this a regression?

Yes, this worked in a previous version

Last Working Version

_No response_

Claude Code Version

2.1.112 (Claude Code)

Platform

Anthropic API

Operating System

Windows

Terminal/Shell

VS Code integrated terminal

Additional Information

_No response_