VS Code extension: thinking blocks render without expand chevron

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?

Summary

In the VS Code extension chat panel, extended thinking blocks render with their status label (e.g., Thinking..., Imagining...) but without the disclosure chevron / twisty that previously allowed expanding them to view the reasoning content. Both click-to-expand and the documented Ctrl+O shortcut fail because there is no clickable disclosure target in the rendered DOM.

This was working previously in the same install. The regression appeared without any deliberate configuration change on my side.

Expected behavior

Per the VS Code extension docs:

Claude's reasoning appears in the conversation as collapsed blocks: click a block to read it, or press Ctrl+O to expand or collapse every thinking block in the session.

A disclosure chevron should render to the left of the status label, and clicking the block should expand it to reveal the reasoning content.

Actual behavior

The Thinking... and Imagining... status labels render as plain text only. No chevron, no disclosure triangle, no clickable affordance. Clicking the label does nothing. The reasoning content is not reachable from the UI. Screenshot attached.

Steps to reproduce

1. Open a Claude Code session in the VS Code extension chat panel
2. Ask a prompt that exercises extended thinking (a non-trivial design or reasoning task)
3. Observe: Thinking... / Imagining... indicators render but have no expand control

Environment

• Claude Code extension: 2.1.123 (win32-x64)
• VS Code: 1.115.0 (user setup), commit 41dd792b5e
• OS: Windows 11 Pro (10.0.26200)
• Model: Claude Opus 4.7 (1M context)

What I already tried

• Restarting VS Code — no change (regression first observed after a routine restart)
• Command Palette → Developer: Reload Window — no change
• Searched claudeCode.* and .claude/settings.json for a thinking-display toggle — none exists in the extension

Additional context

The regression appears to be extension-side rendering — the model continues to produce thinking content (the status indicators advance through phases like Thinking... → Imagining...), but the UI has stopped rendering the disclosure control around it. Likely candidate causes: a recent extension release that touched chat panel rendering, or an interaction with Opus 4.7's interleaved thinking format. Older obsolete versions on disk include 2.1.109, 2.1.114, 2.1.116, 2.1.117, 2.1.119, 2.1.120 — bisecting against those should isolate the regression.

What Should Happen?

A disclosure chevron / twisty should render to the right of the Thinking... status label, making the block expandable. Clicking the block (or pressing Ctrl+O) should expand it to show the reasoning content, per the VS Code extension docs which say: "click a block to read it, or press Ctrl+O to expand or collapse every thinking block in the session."

Error Messages/Logs

Steps to Reproduce

1. Open a Claude Code session in the VS Code extension chat panel
2. Ask a prompt that exercises extended thinking (a non-trivial design or reasoning task)
3. Observe: Thinking... / Imagining... indicators render but have no expand control

Claude Model

Opus

Is this a regression?

Yes, this worked in a previous version

Last Working Version

_No response_

Claude Code Version

2.1.123 (win32-x64)

Platform

Anthropic API

Operating System

Windows

Terminal/Shell

VS Code integrated terminal

Additional Information

<img width="578" height="71" alt="Image" src="https://github.com/user-attachments/assets/b7f35be2-e0d0-4e41-b0b4-8a5f94052abb" />