[BUG] Claude Code cli tool not working with .claude/settings.json

Environment

• Platform (select one):
• [X] Anthropic API
• [ ] AWS Bedrock
• [ ] Google Vertex AI
• [ ] Other: <!-- specify -->
• Claude CLI version: 1.0.84
• Operating System: Ubuntu 24.04 (linux mint 22.1)
• Terminal: Kitty

Bug Description

in one of my projects I was able to get claude to respect the the rules of the .claude/settings.json file.

This was a working setup with a Go project, with the following json rules:

{
  "permissions": {
    "read": {
      "deny": [
        "**/*",
        "**/.env*",
        "**/secrets/**",
        "**/credentials/**",
        "**/*.key",
        "**/*.pem"
      ],
      "allow": [
        "**/*.go",
        "./go.mod",
        "./go.sum",
        "./*.md"
      ]
    }
  }
}

I tried a few variations of the below on my node express project. Ultimately, a plain deny all wasn't working, even.

{
  "permissions": {
    "read": {
      "deny": [
        "**/*"
      ]
    }
  }
}

Steps to Reproduce

1. Run claude command in terminal in node express project
2. Ask it to read .sql file in prisma/migrations/20250708225557_init/migration.sql

Expected Behavior

It should have explained that it could not read the file

Actual Behavior

It read the file just fine. I also asked it if my .claude/settings.json syntax was correct, and it said it was, and that I should report this as a bug, here.

Additional Context

<img width="1587" height="280" alt="Image" src="https://github.com/user-attachments/assets/8521bc9f-ab14-43a6-a4f4-4ddb853efaf4" />