[BUG] VS Code extension stuck on "Spinning..." - claude process never appears in ps aux

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?

Claude Code VS Code extension shows infinite loading spinner after sending a message. The claude process is never created (ps aux shows no claude process after "Launching Claude on channel" appears in logs).

What Should Happen?

Extension should launch claude process and return a response.

Error Messages/Logs

Launching Claude on channel: xxx
[no further response, process never appears in ps aux]

Steps to Reproduce

Install VS Code (migrated from VS Codium)
Install Claude Code extension from marketplace
Install claude CLI via nvm: npm install -g @anthropic-ai/claude-code
Open Claude Code panel, send any message
Spinner spins forever, no response

Claude Model

Other

Is this a regression?

Yes, this worked in a previous version

Last Working Version

2.1.121

Claude Code Version

2.1.121

Platform

Other

Operating System

Other Linux

Terminal/Shell

VS Code integrated terminal

Additional Information

claude CLI works fine in terminal
claude --ide works fine
No claude process appears in ps aux after extension says "Launching"
Previously had VS Codium with old global npm install of claude
Migrated to VS Code + nvm