[BUG] Cowork VM never initializes — AppData\Claude folder stays empty, CoworkVMService running but "Claude Code process exited with code 3"

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?

Environment:

Claude Desktop version: 1.6608.0.0 (MSIX installer)
Windows version: Windows 11
Install location: C:\Program Files\WindowsApps\Claude_1.6608.0.0_x64__pzs8sxrjxfjjc

What's wrong:
Cowork was working previously and broke suddenly. CoworkVMService starts and shows Running, but the VM never initializes. AppData\Roaming\Claude folder remains completely empty — no vm_bundles, no claude-code-vm, nothing downloads.
Error message: Claude Code process exited with code 3

What Should Happen?

VM downloads and initializes on first Cowork launch

Error Messages/Logs

Claude Code process exited with code 3

Steps to Reproduce

Killed all Claude processes via Task Manager and PowerShell
Stopped and restarted CoworkVMService manually
Cleared AppData\Claude cache (folder was already empty)
"Reinstall Workspace" option not visible in Help → Troubleshooting

Claude Model

Opus

Is this a regression?

I don't know

Last Working Version

_No response_

Claude Code Version

1.6608.0.0 (MSIX installer)

Platform

Anthropic API

Operating System

Windows

Terminal/Shell

PowerShell

Additional Information

_No response_