[BUG] [Desktop App Code tab / macOS] Prompt preview overlay covers diff bar and permission prompts (Desktop App v1.7196.0)

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?

<img width="1208" height="1366" alt="Image" src="https://github.com/user-attachments/assets/fc903aab-8ebd-4682-8f73-3dd66f4886c3" />

NOTE: This bug is in the Claude Desktop App's Code tab (Electron UI layer),
not the Claude Code CLI. I'm filing here because the Code tab is powered
by Claude Code and there's no public issue tracker for the Desktop App.
If this is out of scope for this repo, please redirect — thanks.

• Desktop App version: 1.7196.0 (2dbd78)
• NOT applicable: claude --version (I don't use the CLI)
• Platform: macOS
• Surface: Code tab, local session, Bypass permissions mode
• Model: Sonnet 4.6 High

Problem:
After submitting or while previewing a long prompt in the Code tab,
a blue-text overlay (appears to be a prompt preview / pasted content
preview) renders on top of the main workspace with absolute/fixed
positioning. It does NOT push other UI down — it overlays them,
making everything underneath unreachable.

In my session right now (screenshot attached), the overlay is covering:

• The +12903 -249 diff indicator bar
• The "Create PR" button and its dropdown
• A red destructive confirmation prompt on the right side (only the

fragments "r-side issue," and "If it" are visible — the rest is
hidden behind the overlay)

• The branch selector area
• Most of the chat transcript

The "Type / for commands" input is squeezed to the bottom edge of the
screen.

Critical impact:
I cannot see or click the red confirmation prompt that Claude Code
appears to be waiting on. In Bypass permissions mode this is even
worse because non-destructive actions auto-proceed while I have no
visibility into what's happening, and destructive prompts (like the
red one in the screenshot) silently block progress with no way to
interact with them. I literally cannot tell what state the session
is in.

The overlay also doesn't seem to dismiss on its own — it persists
while I'm trying to work.

Screenshot attached. Note the partially-visible red prompt on the
right that I have no way to interact with.

What Should Happen?

• A prompt preview overlay (if that's what this is) should auto-dismiss

after submission, OR

• Have a manual close button (X) visible at all times, OR
• Be bounded to a max height with scroll, OR
• Be rendered inline in the chat transcript instead of as a floating

overlay so subsequent UI elements (diff bar, permission prompts,
Create PR) remain accessible

Error Messages/Logs

Steps to Reproduce

1. Open Code tab, local session, Bypass permissions mode
2. Paste a long prompt (50+ lines) into the input
3. Submit
4. Trigger any action that produces a diff or a confirmation prompt
5. Observe that the blue overlay covers the diff bar, permission

prompt, Create PR button, and most of the workspace, with no
apparent way to dismiss it

Claude Model

None

Is this a regression?

Yes, this worked in a previous version

Last Working Version

_No response_

Claude Code Version

Desktop App MacOS version: 1.7196.0 (2dbd78)

Platform

Anthropic API

Operating System

macOS

Terminal/Shell

Other

Additional Information

_No response_