[BUG] Thinking blocks don't expand on Opus 4.7 in VSCode extension 2.1.117

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?

Summary

Thinking blocks render as "thought for Xs" in the chat panel but cannot be expanded to view content. Clicking the summary line does nothing. The thinking panel is effectively read-only (duration indicator only) when using Opus 4.7.

Environment

• Claude Code for VS Code: 2.1.117
• OS: Windows 11 Pro (10.0.26200)
• Model: claude-opus-4-7 (1M context)
• Settings: {"effortLevel": "xhigh", "showThinkingSummaries": true}

Notes

• showThinkingSummaries: true is set
• Settings schema references ctrl+o for transcript view, but that shortcut belongs to the terminal CLI — not wired in VSCode extension
• Webview bundle still contains expandable thinking-block components (thinkingToggle, areThinkingBlocksExpanded, <details> with onToggle), so the UI exists but isn't receiving renderable content on Opus 4.7
• Downgrading to Opus 4.6 may be a workaround, but that model is no longer in the /model picker

What Should Happen?

Clicking the "thought for Xs" summary (or its chevron) expands an inline block showing the thinking content — both while it is streaming live and after it completes. Clicking again collapses it. This is the behavior that worked on Opus 4.6 and matches the <details> toggle component still present in the webview bundle.

Error Messages/Logs

Steps to Reproduce

1. Use Opus 4.7 in the VSCode extension (native panel, not webview)
2. Send any prompt that triggers multi-second thinking
3. Observe "thought for Xs" line appears
4. Click the line / its chevron → nothing happens

Claude Model

Opus

Is this a regression?

Yes, this worked in a previous version

Last Working Version

2.1.117

Claude Code Version

Claude Opus 4.6 (1M context)

Platform

Anthropic API

Operating System

Windows

Terminal/Shell

VS Code integrated terminal

Additional Information

Live expansion matters for my workflow: I watch thinking as it streams to catch loops or off-track reasoning and interrupt early. On Opus 4.7 the duration indicator is the only signal, which prevents me from doing so. If this isn't a bug, it's an update I'm very unhappy with.