[BUG] setupPanel calls realpathSync on workspace path without scheme check, ENOENT on Remote-SSH with extensionKind=ui

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

Note on duplicates

I expect the auto-triager may close this as a duplicate. Before it does: prior issues #20226 and #20098 covering the same general area were closed as duplicates of #12361, which is an unrelated third-party provider authentication bug closed as "not planned." That dup chain is incorrect. This issue identifies a specific code path (setupPanel to realpathSync) not covered by any prior report. If auto-closed against an unrelated issue, please re-open.

What's Wrong?

When the Claude Code extension is configured to run on the UI side (remote.extensionKind: { "anthropic.claude-code": ["ui"] }) against a Remote-SSH workspace, opening the Claude Code panel fails with ENOENT on every launch. The extension calls realpathSync on the workspace folder path without first checking whether the URI scheme is file: or vscode-remote:. With a Remote-SSH workspace, the path (e.g. /home/<user>) lives on the remote, but realpathSync runs on the local Mac filesystem, expanding it through APFS firmlinks to /System/Volumes/Data/home/<user> and ENOENT-ing because that path exists only on the remote.

This setup (UI-side extensionKind) is the workaround documented in #37919 and required for users whose remote host CPU lacks AVX (see #34481, #24562, #20611, and others) where the bundled native binary cannot run on the remote and must run UI-side. So the path translation bug compounds the AVX bug: the workspace-side path crashes from AVX, and the UI-side workaround crashes from path translation. Together they make the extension fully unusable for users with older remote hardware.

What Should Happen?

setupPanel / createPanel should check the workspace folder URI scheme before calling node:fs.realpathSync. For vscode-remote://... workspaces, either skip the realpath resolution or use vscode.workspace.fs.stat (which is scheme-aware and routes through the appropriate filesystem provider).

Likely fix shape:

if (workspaceFolder.uri.scheme === 'file') {
  resolved = fs.realpathSync(workspaceFolder.uri.fsPath);
} else {
  resolved = workspaceFolder.uri.fsPath;  // or use vscode.workspace.fs.stat
}

### Error Messages/Logs

```shell
From the local Extension Host log when the panel is opened:


Error: ENOENT: no such file or directory, lstat '/System/Volumes/Data/home/<user>'
    at Object.realpathSync (node:fs:2805:29)
    at Object.<anonymous> (node:electron/js2c/node_init:2:5760)
    at Bf.setupPanel (~/.vscode/extensions/anthropic.claude-code-2.1.123-darwin-arm64/extension.js:813:13703)
    at Bf.createPanel (~/.vscode/extensions/anthropic.claude-code-2.1.123-darwin-arm64/extension.js:813:13260)
    at ~/.vscode/extensions/anthropic.claude-code-2.1.123-darwin-arm64/extension.js:873:6668
    at Pg._executeContributedCommand (.../extensionHostProcess.js:503:48683)
    ...

Steps to Reproduce

1. macOS client (Apple Silicon), any Linux remote
2. Local user settings.json:

``json
{
"remote.extensionKind": {
"anthropic.claude-code": ["ui"]
}
}
``

1. Connect to the Linux host via Remote-SSH, open /home/<user> (or any remote workspace) as the workspace folder
2. Open the Claude Code panel
3. Observe ENOENT toast: "A system error occurred (ENOENT: no such file or directory, lstat '/System/Volumes/Data/home/<user>')"
4. Panel renders empty / non-functional

Claude Model

Not sure / Multiple models

Is this a regression?

Yes, this worked in a previous version

Last Working Version

_No response_

Claude Code Version

2.1.123 (extension), package directory anthropic.claude-code-2.1.123-darwin-arm64

Platform

Anthropic API

Operating System

macOS

Terminal/Shell

Other

Additional Information

Operating System

macOS (Apple Silicon) client; Debian Linux remote

Terminal/Shell

VS Code Remote-SSH

Additional Information

• Remote-SSH extension version: 0.122.0
• VS Code: latest stable
• The npm-installed Claude Code CLI works correctly on the same remote host (relates to #34481, extension binary requires AVX, CLI does not)
• Related issues: #37919 (AVX + UI extensionKind, sidebar webview rendering), #34481 (AVX vs. CLI parity), #20226 and #20098 (closed as incorrect duplicates of unrelated #12361)