[BUG]

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 using VSCode 1.122.1 (Universal) and Claude Code extension 2.1.158.
macOS
Shell: zsh

I keep seeing way too often:

The following extensions want to relaunch the terminal to contribute to its environment:
Claude Code for VS Code

Warning persists until terminals are recreated.

What Should Happen?

I believe what should happen is that the terminals don't turn yellow with the warning icon and I don't have to relaunch them so often.

Error Messages/Logs

The following extensions want to relaunch the terminal to contribute to its environment:
Claude Code for VS Code

Steps to Reproduce

Open VS Code.
Open terminal.

Confirm:

echo $CLAUDE_CODE_SSE_PORT

Run:

Developer: Reload Window

Observe:

[Extension Host] Set CLAUDE_CODE_SSE_PORT=<new value>

Existing terminal still contains old value.

VS Code displays:

The following extensions want to relaunch the terminal to contribute to its environment:
Claude Code for VS Code

Claude Model

Sonnet (default)

Is this a regression?

I don't know

Last Working Version

_No response_

Claude Code Version

2.1.158

Platform

Anthropic API

Operating System

macOS

Terminal/Shell

VS Code integrated terminal

Additional Information

_No response_