Feature Request: Scope Claude Code to a subfolder within a multi-folder workspace

Preflight Checklist

• [x] I have searched existing requests and this feature hasn't been requested yet
• [x] This is a single feature request (not multiple features)

Problem Statement

When using the VS Code extension, the working directory is always bound to the workspace root. There's no way to focus Claude Code on a specific subfolder without opening that subfolder as a separate workspace window.

Current workaround (terminal):
In the terminal-based claude CLI, users can cd into a subfolder and launch Claude there — this naturally scopes all file operations and context to that directory.

The gap in the extension:
The extension has no equivalent "scope to subfolder" entry point. Users who manage multiple parallel projects under one workspace root must either:

Open separate windows per project (loses the unified file tree)
Rely on prompt instructions to constrain Claude's scope (not enforced)

Proposed Solution

Add a right-click context menu option on folders in the VS Code Explorer panel:

"Open Claude Code in this folder"

This would start a Claude Code session with CWD set to that subfolder, while keeping the main workspace window intact.

Alternative Solutions

This mirrors a common VS Code pattern — "Open in Integrated Terminal" already does exactly this for terminals. Claude Code would benefit from the same affordance.

Priority

Critical - Blocking my work

Feature Category

CLI commands and flags

Use Case Example

_No response_

Additional Context

_No response_