[Bug] Auto mode display broken when tabbing with Claude 4.8 models

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?

I dont want auto mode showing when i am tabbing, it broke in latest update and 4.8 models

What Should Happen?

I should not be seeing auto mode while tabbing if I dismissed it like it was in previous versions.

Error Messages/Logs

Steps to Reproduce

1. Open Claude code
2. Write a prompt
3. Dismiss auto mode (hide it) as per https://code.claude.com/docs/en/auto-mode-config
4. Tab through plan/edit/.. options
5. See auto mode as option while tabbing

<img width="445" height="84" alt="Image" src="https://github.com/user-attachments/assets/7e33c8d5-de72-4028-91aa-0ff3f3fda015" />

Claude Model

Opus

Is this a regression?

Yes, this worked in a previous version

Last Working Version

_No response_

Claude Code Version

2.1.165

Platform

Anthropic API

Operating System

macOS

Terminal/Shell

Terminal.app (macOS)

Additional Information

_No response_