[BUG] Cowork Linux sandbox fails with HYPERVISOR_SERVICE_ERROR (0x80370102) on Citrix XenServer-based VDI environment

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 Linux sandbox fails to start on Citrix XenServer-based VDI environment. The Cowork tab shows "Workspace unavailable. The isolated Linux environment failed to start." File tools (read/write/edit/search) work correctly. Only the Linux sandbox is affected.

What Should Happen?

Cowork Linux sandbox should start successfully and allow shell command execution, Python/Node script execution, and other sandbox features within the isolated Linux environment.

Error Messages/Logs

[error] [VM:start] VM boot failed: HCS operation failed: failed to create compute system:
HcsWaitForOperationResult failed with HRESULT 0x80370102:
{"Error":-2143878910,
"ErrorMessage":"The virtual machine could not be started because a required feature is not installed.",
"ErrorEvents":[{"Message":"Cannot create system 'cowork-vm' since Hyper-V is not installed on the host.","EventId":11008}]}
[error] [VM:start] HCS error detected, available=true, missing=[], sentinel=HYPERVISOR_SERVICE_ERROR
[error] [VM:start] Startup failed: Error: HYPERVISOR_SERVICE_ERROR

Steps to Reproduce

1. Deploy Claude Desktop v1.3883.0.0 on Windows 11 Pro VM hosted on Citrix XenServer
2. Enable nested virtualization on XenServer host:

xe vm-param-set uuid=<VM_UUID> platform:exp-nested-hvm=true
xe vm-param-set uuid=<VM_UUID> platform:viridian=false

1. Enable Hyper-V features in Windows guest:

Enable-WindowsOptionalFeature -Online -FeatureName Microsoft-Hyper-V -All
Enable-WindowsOptionalFeature -Online -FeatureName HypervisorPlatform

1. Confirm: bcdedit hypervisorlaunchtype=Auto, vmcompute Running
2. Reboot VM
3. Open Claude Desktop → Cowork tab
4. Observe: Linux sandbox fails to start with HYPERVISOR_SERVICE_ERROR

Claude Model

Sonnet (default)

Is this a regression?

I don't know

Last Working Version

_No response_

Claude Code Version

N/A - This is Claude Desktop (Cowork), not Claude Code

Platform

Anthropic API

Operating System

Windows

Terminal/Shell

PowerShell

Additional Information

• Host Hypervisor: Citrix XenServer
• VDI Platform: Citrix Virtual Apps and Desktops
• Claude Desktop: v1.3883.0.0 (Microsoft Store / MSIX)
• VirtualizationFirmwareEnabled: True
• HyperVisorPresent: True
• All Hyper-V features: Enabled
• bcdedit hypervisorlaunchtype: Auto
• vmcompute: Running
• Cowork Readiness Check result: PASS (but sandbox still fails)
• WSL2 also fails with same error (HCS_E_HYPERV_NOT_INSTALLED)

Root cause: XenServer does not fully expose HCS-required hypervisor interface to Windows guests, unlike VMware vSphere which has Microsoft collaboration for nested Hyper-V support. XenServer official docs confirm "nested virtualization is not supported for Windows VMs."

Related issues: #27316, #27317, #29887, #32004, #33784, #45715

Business impact: XenServer/Citrix Hypervisor is widely used in enterprise VDI and DaaS deployments, especially in regulated industries and network-separated environments. Enterprise customers in these environments cannot use Cowork's core sandbox functionality.