[BUG] Grep tool causes "hook execution cancelled" errors that make Claude Code unusable

Environment

• Platform (select one):
• [x] Other: Claude Code CLI
• Claude CLI version: 1.0.89 (Claude Code)
• Operating System: macOS 15.6.1 (24G90)
• Terminal: Terminal App (or iTerm2 - specify which you use)

## Bug Description
PostToolUse:Grep hook execution consistently gets cancelled, displaying "PostToolUse:Grep hook execution cancelled" error messages that interrupt and stop Claude sessions, making Claude Code unusable.

## Steps to Reproduce

1. Start a Claude Code session
2. Ask Claude to search for anything using the Grep tool
3. Observe "PostToolUse:Grep hook execution cancelled" error appears
4. Claude session gets interrupted/stopped

## Expected Behavior
Grep tool should execute successfully without hook cancellation errors, and Claude session should continue normally.

## Actual Behavior

• "PostToolUse:Grep hook execution cancelled" error appears consistently
• Error interrupts the Claude session
• Makes Claude Code effectively unusable for any tasks requiring search functionality

## Additional Context

• Issue persists even with completely disabled hooks ("hooks": {})
• Reinstalling Claude Code does not resolve the issue
• Multiple Claude processes were initially running, but killing all processes and clearing cache didn't fix it
• Error appears to be a PostToolUse event handling bug rather than user configuration issue

Immediate workaround

• Instruct Claude to use rg (ripgrep) via the Bash tool for all file searches instead of the Grep tool

<img width="600" height="380" alt="Image" src="https://github.com/user-attachments/assets/9b4e2265-ff6e-4741-bd64-00bacab7c738" />