[BUG] Claude code in VS Code started in bypass permissions doesn't show output on first message

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?

VS Code Claude Code extension

1. Install
2. Open VS code settings
3. Allow Dangerously Skip Permissions - enable
4. Set Claude Code: Initial Permission Mode - Bypass permissions
5. Run a slightly bigger prompt and use a command at the start
6. The output from the first prompt is not shown - or hidden behind the UI.
7. Have to stop Claude, trigger again with message "Continue" and the output will start to appear

Happening most of the time

What Should Happen?

Messages should be shown in the UI from the first message. Seems like a specific edge case scenario only in Bypass permissions mode.
The messages seem to stay in the background of the first long message - instead of appearing below it. I can see the scroll expanding but the messages are invisible. This is definitely a UI problem

Error Messages/Logs

Steps to Reproduce

VS Code Claude Code extension

1. Install
2. Open VS code settings
3. Allow Dangerously Skip Permissions - enable
4. Set Claude Code: Initial Permission Mode - Bypass permissions
5. Run a slightly bigger prompt and use a command at the start
6. The output from the first prompt is not shown - or hidden behind the UI.
7. Have to stop Claude, trigger again with message "Continue" and the output will start to appear

Happening most of the time

Claude Model

Not sure / Multiple models

Is this a regression?

No, this never worked

Last Working Version

_No response_

Claude Code Version

2.1.133

Platform

Anthropic API

Operating System

macOS

Terminal/Shell

Terminal.app (macOS)

Additional Information

_No response_