Claude Code context window not resetting — stuck at 1M instead of 200k on Pro

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?

After a session ends, Claude Code is no longer resetting the context window. Instead of resetting to the standard 200k context on a new session, it carries over the previous session's context and hits the 1M limit, triggering the error:
"API Error: Usage credits required for 1M context · turn on usage credits at claude.ai/settings/billing, or use --model to switch to standard context"

What Should Happen?

Context window resets to 200k at the start of each new session.

Error Messages/Logs

Steps to Reproduce

Run a Claude Code session until context is large
Exit the session
Start a new Claude Code session in the same project directory
Error appears immediately without any new usage

Claude Model

Sonnet (default)

Is this a regression?

Yes, this worked in a previous version

Last Working Version

_No response_

Claude Code Version

2.1.158

Platform

Anthropic API

Operating System

Windows

Terminal/Shell

Non-interactive/CI environment

Additional Information

Workaround attempted: /clear command does not resolve it. Issue persists across restarts.