Bug: Claude Desktop fails to find downloaded VM files and workspace initialization fails

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?

In the latest Claude Desktop version on Windows 10, the client attempts to locate VM files (claude-code-vm / vm_bundles\claudevm.bundle) in:

%LOCALAPPDATA%\Claude-3p

However, the downloaded VM files are actually stored in:

%LOCALAPPDATA%\Packages\Claude_<random_string>\LocalCache\Local\Claude-3p\vm_bundles

This causes workspace initialization to fail, producing errors like:

Failed to start Claude's workspace
RPC error -1: SDK version 2.1.170 not verified

or:

claude-code-vm not found

What Should Happen?

Claude Desktop should correctly locate the VM files in %LOCALAPPDATA%\Claude-3p, or automatically redirect to the actual cache directory in Packages so that workspace initializes without manual copying.

Error Messages/Logs

Failed to start Claude's workspace
RPC error -1: SDK version 2.1.170 not verified
claude-code-vm not found

Steps to Reproduce

1. Install the latest Claude Desktop on Windows 10.
2. Open the client and click "reinstall workspace" to start downloading VM files.
3. Restart the computer (in some cases, the %LOCALAPPDATA%\Claude-3p folder may lose files).
4. Open Claude again – workspace fails to initialize.

Claude Model

None

Is this a regression?

I don't know

Last Working Version

_No response_

Claude Code Version

2.1.170

Platform

Anthropic API

Operating System

Windows

Terminal/Shell

Terminal.app (macOS)

Additional Information

• OS: Windows 10
• Claude Desktop version: latest version (downloaded from claude.ai)
• Issue type: Workspace / VM initialization
• SDK version mentioned in error: 2.1.170