[BUG] Click-to-expand on Thinking blocks does not work in VSCode extension when extended thinking is enabled

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?

In the Claude Code VSCode native extension on Windows, the collapsed "Thinking..." block that appears in the chat when extended thinking is enabled does not expand when clicked. The click handler appears unresponsive. This used to work in earlier versions of the extension; it now does not.

What Should Happen?

Clicking the collapsed "Thinking..." block should expand it and reveal the model's reasoning tokens, matching the prior behavior. Ideally there should also be a documented VSCode-extension-specific way (a Command Palette command, a keybinding configurable through VSCode's own keybindings system, or a settings.json toggle) to expand thinking blocks reliably without depending on the click handler.

Error Messages/Logs

Steps to Reproduce

1. Open the Claude Code chat panel in VSCode.
2. Ensure the extended thinking toggle is checked (enabled).
3. Send any prompt that causes the model to use extended thinking.
4. After the response renders, click on the collapsed "Thinking..." block.

Claude Model

Opus

Is this a regression?

Yes, this worked in a previous version

Last Working Version

2.1.110

Claude Code Version

2.1.110

Platform

Anthropic API

Operating System

Windows

Terminal/Shell

VS Code integrated terminal

Additional Information

This was working fine with 4.6 and then when 4.7 came out it stopped working.