VS Code extension ignores settings.json allow list and bypassPermissions for UNC network path file edits

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?

Environment:

Claude Code extension: 2.1.167
VS Code: 1.123.0
OS: Windows Server 2022 x64 (10.0.20348)
Extension mode: Edit automatically
Settings configured (user-level settings.json):

{
"permissions": {
"defaultMode": "bypassPermissions",
"allow": [
"Edit",
"Edit(\\\\server.domain.local\\share\\path\\**)",
"Write",
"Bash",
"PowerShell",
...
]
},
"skipDangerousModePermissionPrompt": true
}
Workspace-level .claude/settings.json also contains "defaultMode": "bypassPermissions".

Expected behavior:
No permission dialogs. The allow list entry "Edit" (bare) and the explicit UNC path glob, combined with bypassPermissions and skipDangerousModePermissionPrompt: true, should suppress all prompts.

Actual behavior:
Every Edit tool call on a UNC network path (\\server\share\...) produces a dialog: "Make this edit to [path]? 1 Yes / 2 No" — regardless of extension mode or settings.json configuration. This occurs in both Auto mode and Edit automatically mode.

Similarly, PowerShell tool calls prompt despite "PowerShell" appearing as a bare allow entry.

Steps to reproduce:

Add "defaultMode": "bypassPermissions" and "Edit" to the allow list in user-level settings.json
Set extension mode to "Edit automatically"
Ask Claude to edit a file on a UNC path (e.g., \\server\share\file.md)
Observe permission dialog appears
Additional notes:

The VS Code extension UI does not expose a "Bypass permissions" mode — available modes are Ask before edits, Edit automatically, Plan mode, and Auto mode
The allow list appears to be completely ignored by the VS Code extension; neither path-specific nor bare allow entries have any effect
This forces manual approval on every tool call for users whose governed workspace is on a network share

What Should Happen?

No permission prompts

Error Messages/Logs

Steps to Reproduce

claude-code-bug-report.md

Claude Model

Sonnet (default)

Is this a regression?

I don't know

Last Working Version

_No response_

Claude Code Version

2.1.167

Platform

Anthropic API

Operating System

Windows

Terminal/Shell

VS Code integrated terminal

Additional Information

_No response_