Mouse tracking breaks terminal right-click context menu and text selection

Description

Starting with version 2.1.150, Claude Code enables terminal mouse tracking (xterm mouse reporting) in the terminal where it runs. This breaks standard terminal interactions that worked fine in v2.1.148 and earlier.

Environment

• OS: Ubuntu (X11)
• Terminal: GNOME Terminal
• Claude Code version: 2.1.150
• Previous working version: 2.1.148

What broke

1. Right-click context menu no longer appears — mouse events are intercepted by Claude Code before GNOME Terminal can show its native context menu.
2. Text selection with mouse doesn't register — click-and-drag appears to select text visually, but the terminal doesn't register it as a real selection, so Copy remains greyed out in the context menu.

Workarounds (tedious)

• Shift + right-click to force the terminal context menu
• Shift + click-and-drag to force terminal text selection
• Ctrl+Shift+C / Ctrl+Shift+V for copy/paste

Expected behavior

Previous versions (≤ 2.1.148) did not enable mouse tracking, so right-click, text selection, and copy/paste all worked natively in the terminal. This behavior should be restored, or at minimum a setting should be provided to disable mouse reporting.

Suggestion

Add a configuration option (e.g. "mouseReporting": false in settings.json) to allow users to opt out of mouse tracking.