[BUG] Claude Desktop Windows 11 Cowork and Code tabs give this error always now: 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?

Desktop app version: 1.7196.0 (2dbd78)
Windows version: Windows 11 24H2 (OS Build 26100.8037)
Git version: 2.54.0.windows.1
That Git is at C:\Program Files\Git\cmd\git.exe
The exact error: "Claude Code process exited with code 3"
What you've tried: setting Git Bash path, switching to PowerShell, killing processes, clean config test

What Should Happen?

Error code 3 should not occur. Has been working for weeks until recently. Chat works okay in the Desktop app, but both Cowork and Code yield this error.

Error Messages/Logs

Nothing in Event Viewer on this issue also.

Steps to Reproduce

1. Launch Claude Desktop.
2. Select Cowork or Code tab.
3. Type any prompt and enter.
4. Error occurs.

Claude Model

None

Is this a regression?

Yes, this worked in a previous version

Last Working Version

_No response_

Claude Code Version

2.1.111 (Claude Code)

Platform

Anthropic API

Operating System

Windows

Terminal/Shell

PowerShell

Additional Information

_No response_