[BUG] Claude Code for VSCode infinite update prompt

Environment

• Platform (select one):
• [ ] Anthropic API
• [ ] AWS Bedrock
• [ ] Google Vertex AI
• [x] Other: VSCode Extension
• Claude CLI version: 1.0.86
• Operating System: macOS 15.6.1
• Terminal: <!-- e.g. iTerm2, Terminal App -->

Bug Description

After starting Claude from the console, the system prompts that the Claude Code for VSCode extension needs to be updated. Even after updating, restarting the extension or VSCode, and restarting Claude, the prompt to update the extension continues indefinitely, causing an infinite update loop.

Steps to Reproduce

1. Start Claude from the console.
2. Observe the prompt to update Claude Code for VSCode.
3. Update the extension.
4. Restart the extension or VSCode.
5. Restart Claude from the console.
6. The update prompt reappears and continues indefinitely.

Expected Behavior

After updating the Claude Code for VSCode extension and restarting, there should be no further prompts to update, and Claude should start normally without looping.

Actual Behavior

The prompt to update Claude Code for VSCode continues to appear infinitely after restarting the extension or VSCode and restarting Claude.

Additional Context

• VSCode version: Version 1.103.2

• Claude Code for VSCode version: 1.0.86