[BUG] "Allow Dangerously Skip Permissions" overrides plan mode in VS Code extension

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?

_I am opening this as a new issue as instructed in #17544_

When "Allow Dangerously Skip Permissions" is enabled while plan mode is active, the VS Code extension automatically implements the plan without asking for my approval first, skipping the permission prompt entirely. My understanding is that enabling this setting should still respect plan mode, it should only add a new option to the approval modes list (such as "Auto approve" or "Bypass"), not override plan mode entirely.

What Should Happen?

Even while the "Allow Dangerously Skip Permissions" setting is enabled in settings, it should still respect the normal behavior of plan mode.

Error Messages/Logs

Steps to Reproduce

1. Enable the "Allow Dangerously Skip Permissions" setting in the VS Code extension.
2. Enable plan mode.
3. Submit a prompt for a plan. (tested with default model with high thinking)
4. Observe the planning properly taking place.
5. Observe the plan being implemented without asking.

Claude Model

Sonnet (default)

Is this a regression?

I don't know

Last Working Version

_No response_

Claude Code Version

2.1.145 (VS Code)

Platform

Other

Operating System

Windows

Terminal/Shell

Other

Additional Information

Platform - I selected other because you don't have an option for selecting Claude Pro plan. Not sure if that counts as API.
Terminal/Shell - I selected 'other' because I am using the extension and there is no choice for 'none' or 'n/a'.

Not sure if this is worth noting: but the planning phase was significantly extensive compared to previous usage of plan mode with the same codebase. I would say planning took around 10 minutes while using 13% of my usage quota.

This issue occurred while editing a codebase running in an Ubuntu development container alongside the 'Dev Containers' Microsoft VS Code extension with the host machine as Windows 11. I selected Windows for the operating system in this report which might be incorrect given the scenario.