[BUG] Fenced code blocks in Claude responses render as inline code in VS Code extension

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?

When Claude responds with fenced code blocks (triple backtick syntax), they render as inline code in the VS Code extension chat panel instead of as block-level code. This makes commands harder to read and removes the ability to copy them cleanly.

What Should Happen?

Fenced code blocks in Claude's responses should render as block-level code with syntax highlighting and a copy button, consistent with how they appear in the Claude terminal CLI and on claude.ai.

Error Messages/Logs

Steps to Reproduce

1. Open Claude Code in the VS Code extension
2. Ask Claude to show a bash command — e.g. "show me how to check my git status"
3. Observe the response: the command renders as inline code (e.g. git status) rather than a fenced code block

Claude Model

Sonnet (default)

Is this a regression?

I don't know

Last Working Version

_No response_

Claude Code Version

2.1.126 (VS Code Extension)

Platform

Anthropic API

Operating System

macOS

Terminal/Shell

VS Code integrated terminal

Additional Information

_No response_