[BUG] activation of 1M context in VSCode

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?

In Claude Pro plan 1M Context is automatically activated regardless of CLAUDE_CODE_DISABLE_1M_CONTEXT=1 in ~/.claude/settings.json and claudeCode.environmentVariables in VSCode settings. Happens with auto-compact.

What Should Happen?

It should stay in 200k. With this bug it's very difficult to work.

Error Messages/Logs

Error: Error during compaction: 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

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

Claude Model

Sonnet (default)

Is this a regression?

No, this never worked

Last Working Version

_No response_

Claude Code Version

2.1.149

Platform

Anthropic API

Operating System

macOS

Terminal/Shell

Terminal.app (macOS)

Additional Information

_No response_