[BUG] VS Code extension: session rename reverts to auto-generated name from first prompt

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?

In the Claude Code VS Code extension, renaming a session via the sidebar does not persist. After typing a new name and confirming, the session title immediately reverts to the auto-generated name that was derived from the first prompt/message in that session.

What Should Happen?

Once a user manually renames a session, that custom name should persist. The rename should take priority over the auto-generated title and not be overwritten.

Error Messages/Logs

Steps to Reproduce

1. Open Claude Code in the VS Code extension
2. 2. Start a new session and send any message (e.g. "hello")
3. 3. In the sidebar, hover over the session entry — a pencil (edit) icon appears
4. 4. Click the pencil icon and type a new custom name, then confirm (Enter)
5. 5. Observe: the session name immediately reverts to the auto-generated title based on the first prompt

Claude Model

None

Is this a regression?

I don't know

Last Working Version

_No response_

Claude Code Version

latest

Platform

Anthropic API

Operating System

Windows

Terminal/Shell

VS Code integrated terminal

Additional Information

_No response_