[BUG] API Error: Extra usage is required for 1M context · enable extra usage at claude.ai/settings/usage, or use --model to switch to standard context

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?

API Error: Extra usage is required for 1M context · enable extra usage at claude.ai/settings/usage, or use --model to switch to standard context
I am getting this above error.
Screenshot is attached. Please tell me what should i do?

<img width="2200" height="1304" alt="Image" src="https://github.com/user-attachments/assets/1941aed6-983e-4b98-9352-52e3e42817ee" />

What Should Happen?

<img width="2200" height="1304" alt="Image" src="https://github.com/user-attachments/assets/0a78efe5-febf-488c-9002-938f8358cb62" />

Error Messages/Logs

API Error: Extra usage is required for 1M context · enable extra usage at claude.ai/settings/usage, or use --model to switch to standard context

Steps to Reproduce

I am using vscode extension

Claude Model

Sonnet (default)

Is this a regression?

Yes, this worked in a previous version

Last Working Version

_No response_

Claude Code Version

using vscode extension

Platform

Anthropic API

Operating System

macOS

Terminal/Shell

VS Code integrated terminal

Additional Information

_No response_