[BUG] Cowork VM boot fails with HYPERVISOR_SERVICE_ERROR on Windows 11 MSIX install

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?

Cowork tab stuck on "Working on it..." / "Server is busy. Retrying..." — VM never boots.

What Should Happen?

Co-work should run and CoworkVMService can be found in Services.msc

Error Messages/Logs

[HostLoop] VM boot failed; bash proxy unavailable: HYPERVISOR_SERVICE_ERROR

Steps to Reproduce

Reinstall Claude Desktop (multiple times)
Enabled HypervisorPlatform via DISM and PowerShell
Set bcdedit hypervisorlaunchtype to Auto
Full system reboots after each change
None resolved the issue

main.log
ssh.log

Claude Model

Sonnet (default)

Is this a regression?

Yes, this worked in a previous version

Last Working Version

_No response_

Claude Code Version

1.3109.0.0

Platform

Anthropic API

Operating System

Windows

Terminal/Shell

PowerShell

Additional Information

System info:

OS: Windows 11 (10.0.26200.8246)
Claude version: 1.3109.0.0 (MSIX / Microsoft Store install)
Install location: C:\Program Files\WindowsApps\Claude_1.3109.0.0_x64__pzs8sxrjxfjjc

Windows features status:

VirtualMachinePlatform: ✅ Enabled
HypervisorPlatform: ✅ Enabled
hypervisorlaunchtype: ✅ Auto
vmcompute service: ✅ Running