Bypass permissions mode no longer appears in session UI on Claude Code Desktop (Mac) despite Settings toggle being enabled

Environment

• Claude Code Desktop (macOS app, com.anthropic.claudefordesktop)
• Embedded Claude Code version: 2.1.121 (under ~/Library/Application Support/Claude/claude-code/2.1.121/)
• (For reference, separate CLI install at /usr/local/bin/claude reports 2.1.7 — but the Desktop app uses its own embedded 2.1.121.)
• macOS 26.4.1 (build 25E253), Apple Silicon
• Setting: "Allow bypass permissions mode" toggle is ENABLED in Desktop Settings

Description

After a recent update, bypass-permissions mode no longer appears in the in-session mode picker, even though the "Allow bypass permissions mode" toggle is enabled in Desktop Settings. Previously this toggle made the mode selectable from the session UI; now the option is missing from the picker.

Expected behavior

With "Allow bypass permissions mode" enabled in Settings, bypass mode should be selectable from the in-session mode picker (Shift+Tab cycle / mode selector pill at the bottom of the session pane), the same as the other modes (Default / Plan / Accept Edits).

Actual behavior

The mode does not appear in the picker. There is no visible affordance in the session UI to enter bypass mode. The Settings toggle appears to have no effect on what modes are exposed in-session.

Workaround attempt — not effective on Desktop

Adding the documented schema entry to ~/.claude/settings.json:

{
  "permissions": {
    "defaultMode": "bypassPermissions"
  }
}

…does not cause the Desktop app to start fresh sessions in bypass mode. After saving the file, fully quitting the app, and relaunching, a fresh session still opens in Plan mode with no bypass option exposed in the picker. Schema reference: https://code.claude.com/docs/en/settings.md

Possible causes (any of which would be useful to confirm or rule out):

• The Desktop app does not read ~/.claude/settings.json, or reads a different config location.
• It reads the file but ignores defaultMode for bypass specifically.
• The "Allow bypass permissions mode" toggle is no longer wired to anything in the current build.

Suggested triage

Either (a) the Settings toggle should once again expose bypass mode in the in-session picker, or (b) the toggle's purpose has changed and the docs / UI copy should reflect the new behavior. Right now the toggle reads as a no-op and the documented defaultMode: "bypassPermissions" workaround does not bridge the gap on Desktop.

Reproduction steps

1. Open Claude Code Desktop on macOS (embedded version 2.1.121).
2. Settings → enable "Allow bypass permissions mode".
3. (Optionally) add {"permissions":{"defaultMode":"bypassPermissions"}} to ~/.claude/settings.json.
4. Fully quit Claude Code Desktop (⌘Q) and relaunch.
5. Start a new session and open the mode picker.
6. Observe: bypass-permissions mode is not listed; new session opens in Plan mode.