Claude Code VS Code extension forces 1M context on Pro plan - Windows

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?

Claude Code is forcing 1M context on every message, even simple "hello" messages, making the extension completely unusable on Pro plan.

Plan: Pro ($20/month)
Platform: Windows 10 x64
VS Code: 1.122.1
Claude Code: 2.1.158

Every single message returns the error below.

What Should Happen?

Claude Code should work within Pro plan limits without requiring Usage Credits. Simple messages should not require 1M context. Model configuration options should be respected.

Error Messages/Logs

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

1. Have Pro plan ($20/month)
2. Install Claude Code extension on VS Code 1.122.1 (Windows 10)
3. Open any project folder
4. Send any message, even just "hello"
5. Error appears immediately

Workarounds tried - none worked:

• "claude.model" in settings.json
• "claudeCode.model" in settings.json
• ANTHROPIC_MODEL environment variable
• ANTHROPIC_DEFAULT_SONNET_MODEL environment variable
• .claude.json in %USERPROFILE%
• claude.json in %APPDATA%\Claude
• /model command returns "isn't available in this environment"

Claude Model

None

Is this a regression?

Yes, this worked in a previous version

Last Working Version

Unknown - worked before May 2026

Claude Code Version

2.1.158

Platform

Anthropic API

Operating System

Windows

Terminal/Shell

VS Code integrated terminal

Additional Information

_No response_