VS Code extension: option to auto-resume last session when reopening a workspace folder

Preflight Checklist

• [x] I have searched existing requests and this feature hasn't been requested yet
• [x] This is a single feature request (not multiple features)

Problem Statement

The Claude Code VS Code native extension starts a fresh session every time a workspace folder is opened. Please add an opt-in setting to automatically resume the most recent session for that workspace folder instead.

Current behavior
Open folder A → start a session, do work, close VS Code (or switch folders).
Reopen folder A → Claude Code panel shows a brand-new empty session.
To get back, the user must click Session history and pick the last entry manually.

Proposed Solution

A setting such as claude-code.session.autoResumeLast (default false to preserve current behavior) that, when enabled, automatically loads the most recent session associated with the current workspace folder on extension activation — equivalent to claude --continue in the CLI.

Why it matters
Consultants and contractors who switch between client folders many times a day lose continuity on every switch. The current workflow (open folder → click panel → click Session history → scan list → click correct session) adds meaningful friction compared to "open folder, keep working." The CLI already supports --continue; the extension should offer parity as an opt-in.

Nice-to-haves
Per-workspace override (some folders auto-resume, others don't).
A "Resume last session in this folder" command in the Command Palette as a lighter alternative for users who don't want full auto-resume.
Visible indicator in the panel header showing which session was auto-resumed, with a one-click "Start new session instead" affordance.

Alternative Solutions

Currently I work around this by clicking Session history and pick the last entry manually

Priority

Medium - Would be very helpful

Feature Category

Configuration and settings

Use Case Example

Open client folder A -> start a session, do some work
Open client folder B -> click history and select session, keep working
Open client folder C -> click history and select session, keep working
Open client folder A -> click history and select session, keep working
Open client folder C -> click history and select session, keep working
Open client folder B -> click history and select session, keep working

I work on one client at a time, but I switch to different projects throughout the day. I am not sure why I need to always be presented with a new session. Start with the last known session and I can determine if I want a new session.

Additional Context

_No response_