[BUG] VSCode extension forces 1M context on Sonnet 4.6 for Pro users with no way to opt out**

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?

[BUG] VSCode extension forces 1M context on Sonnet 4.6 for Pro users with no way to opt out

Plan: Claude Pro
Extension version: latest
OS: Fedora Linux

What's wrong:
The VSCode extension shows "API Error: Usage credits required for 1M context" even though:

• Sonnet 4.6 is selected (Default/recommended model)
• I never opted into 1M context
• CLAUDE_CODE_DISABLE_1M_CONTEXT=1 is set in both shell and VSCode terminal.integrated.env.linux
• ~/.claude/settings.json has "model": "claude-sonnet-4-6" explicitly set

None of these workarounds have any effect. The extension ignores all configuration and still attempts to use 1M context, making Claude Code completely unusable on a Pro plan without paying extra.

Expected behavior:
Sonnet 4.6 on Pro plan should use standard 200k context window with no usage credits required.

Actual behavior:
Extension forces 1M context regardless of model selection or environment variables, blocking all usage with a credits error.

Steps to reproduce:

1. Log in with Claude Pro account
2. Open Claude Code in VSCode
3. Select Default (Sonnet 4.6) model
4. Send any message
5. Observe: "API Error: Usage credits required for 1M context"

What Should Happen?

<img width="799" height="493" alt="Image" src="https://github.com/user-attachments/assets/7a4b84d8-25b2-4bae-a9a5-1fe4e2f6a42f" />

Error Messages/Logs

API Error: Usage credits required for 1M context · turn on usage credits at claude.ai/settings/usage, or use --model to switch to standard context

Steps to Reproduce

<img width="799" height="493" alt="Image" src="https://github.com/user-attachments/assets/5b1329dd-37bb-4ac2-b6eb-2bf97818b6b0" />
<img width="695" height="728" alt="Image" src="https://github.com/user-attachments/assets/b7ea6757-39ad-4ed8-ae64-10e91d3e28b3" />

Claude Model

None

Is this a regression?

Yes, this worked in a previous version

Last Working Version

_No response_

Claude Code Version

SONET 4.6

Platform

Anthropic API

Operating System

macOS

Terminal/Shell

Terminal.app (macOS)

Additional Information

_No response_