VS Code: effort toggle is unreliable and has no in-chat observability

Description

The effort toggle in the Claude Code VS Code extension has two related problems:

1. Reliability — the toggle has silently broken multiple times. When it breaks, there is no error or indicator; the setting appears to have taken effect but hasn't.

1. No observability — there is no in-chat indicator of the current effort level. The model itself has no visibility into what effort setting is active, so neither the user nor the model can confirm the toggle actually took effect. The only way to notice a broken state is to observe degraded output quality and guess.

Impact

Users can't trust the effort toggle because there's no way to verify it's working. A broken toggle producing lower-effort responses is indistinguishable from correct behavior without external debugging.

Suggested fix

Add a visible effort-level indicator somewhere in the chat UI (e.g. in the chat header or as a persistent badge). Exposing the current effort level in the system context so the model can confirm it would also help.

Environment

• Platform: macOS (Darwin 25.4.0)
• Editor: VS Code
• Extension: Claude Code VS Code extension