[BUG] Claude Code extension fails to activate in Cursor (and possibly VS Code)

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?

The Claude Code extension (v2.1.137) fails to activate with this error in the Developer Console:

Activating extension 'Anthropic.claude-code' failed: The argument 'filename' must be a file URL object, file URL string, or absolute path string. Received 'file:///home/runner/work/claude-cli-internal/claude-cli-internal/build-agent-sdk/sdk.mjs'.
This results in: command 'claude-vscode.editor.openLast' not found

Environment:

Editor: Cursor (latest version)
OS: Windows
Extension version: 2.1.137
CLI version: latest (installed via npm)
Previously working with extension v2.0.51 / Cursor older version
Notes:
The path file:///home/runner/work/... looks like a Linux CI build path leaking into the extension bundle. The extension was working fine before updating Cursor and the extension.

What Should Happen?

The Claude Code extension (v2.1.137) fails to activate with this error in the Developer Console:

Activating extension 'Anthropic.claude-code' failed: The argument 'filename' must be a file URL object, file URL string, or absolute path string. Received 'file:///home/runner/work/claude-cli-internal/claude-cli-internal/build-agent-sdk/sdk.mjs'.
This results in: command 'claude-vscode.editor.openLast' not found

Environment:

Editor: Cursor (latest version)
OS: Windows
Extension version: 2.1.137
CLI version: latest (installed via npm)
Previously working with extension v2.0.51 / Cursor older version
Notes:
The path file:///home/runner/work/... looks like a Linux CI build path leaking into the extension bundle. The extension was working fine before updating Cursor and the extension.

Error Messages/Logs

Steps to Reproduce

The Claude Code extension (v2.1.137) fails to activate with this error in the Developer Console:

Activating extension 'Anthropic.claude-code' failed: The argument 'filename' must be a file URL object, file URL string, or absolute path string. Received 'file:///home/runner/work/claude-cli-internal/claude-cli-internal/build-agent-sdk/sdk.mjs'.
This results in: command 'claude-vscode.editor.openLast' not found

Environment:

Editor: Cursor (latest version)
OS: Windows
Extension version: 2.1.137
CLI version: latest (installed via npm)
Previously working with extension v2.0.51 / Cursor older version
Notes:
The path file:///home/runner/work/... looks like a Linux CI build path leaking into the extension bundle. The extension was working fine before updating Cursor and the extension.

Claude Model

Opus

Is this a regression?

I don't know

Last Working Version

_No response_

Claude Code Version

2.1.137

Platform

Anthropic API

Operating System

Windows

Terminal/Shell

Terminal.app (macOS)

Additional Information

_No response_