[BUG] VS Code Editor Pane overlaps/clips Claude Settings Dropdown in Secondary Sidebar

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 the Claude Code panel is located in the Secondary Sidebar (right side), the settings popover menu is being rendered behind the main Editor Group. Instead of the menu floating over the code editor, the editor pane physically occludes/slices through the menu.

<img width="1312" height="912" alt="Image" src="https://github.com/user-attachments/assets/47ee5c2b-ffd4-477a-819a-97a1d5b84358" />

What Should Happen?

The settings popover menu should be rendered on a layer above all other workbench components, including the Editor Group.

Error Messages/Logs

Steps to Reproduce

1. Environment: Open VS Code on a high-resolution display (e.g., Apple Studio Display at default 5K scaling).
2. Layout Setup: Ensure the Secondary Sidebar is enabled on the right-hand side of the workbench.
3. Extension Placement: Drag the Claude Code view into the Secondary Sidebar (right side).
4. Editor State: Open any file (or leave the editor empty) so the middle Editor Group is visible.
5. Trigger Bug: Click the "hand" icon (or the mode indicator) at the bottom right of the Claude Code panel to open the settings/mode popover menu.
6. Observe: The menu will attempt to expand to the left. Instead of floating over the code editor, the Editor Pane physically occludes/clips the menu, slicing it off at the sidebar border.

Claude Model

None

Is this a regression?

I don't know

Last Working Version

_No response_

Claude Code Version

2.1.131

Platform

Anthropic API

Operating System

macOS

Terminal/Shell

VS Code integrated terminal

Additional Information

_No response_