[BUG] Desktop App Prompt Preview Overlay covers large portions of the output screen degrading UX and making it hard to read output.

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 prompt preview overlay consumes large portions of the output viewport and makes it extremely difficult to read text and interact with the program. Lack of settings to turn this feature off exacerbates the problem.

What Should Happen?

1. The preview should be optional and disabled by default.
2. The preview should be collapsed to a single line by default with a expansion toggle allowing the user to view the whole prompt, and then minimize it again.

Error Messages/Logs

Steps to Reproduce

1. Open any session in claude desktop.
2. Input a long prompt (several paragraphs).
3. Enjoy your reduced screen-space.

Claude Model

None

Is this a regression?

No, this never worked

Last Working Version

_No response_

Claude Code Version

1.6608.2.0

Platform

Anthropic API

Operating System

Windows

Terminal/Shell

Other

Additional Information

Adding the issue here because there is no dedicated issue tracker for the Desktop App.