[FEATURE] Inline editor diffs with line-by-line accept/reject (like Copilot)

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 Claude Code makes file edits in VS Code, diffs are only shown in the
chat panel and can only be accepted/rejected as a whole. This makes it hard
to selectively keep some changes while rejecting others.

Expected Behavior

The same UX that GitHub Copilot Chat provides:

• Changes appear directly in the editor as inline diffs (green/red highlighting)
• Each hunk or line can be accepted or rejected independently
• Changes remain visible in the editor until explicitly accepted or dismissed
• Keyboard shortcuts to accept/reject individual changes (e.g., Ctrl+Shift+Enter)

Proposed Solution

1. Use VS Code's built-in TextEditor.decorationType API to render inline

additions (green) and deletions (red) directly in the active editor

1. Add CodeLens or gutter actions ("Accept" / "Reject") per hunk/line
2. Support three actions per change:

• Accept (apply the change)
• Reject (revert to original)
• Accept All / Reject All (bulk action)

1. Keep the current chat-panel diff as a fallback for users who prefer it,

controlled by a setting like "diffStyle": "inline" | "panel"

1. For notebook (.ipynb) files, show the diff inline in the cell editor

Alternative Solutions

_No response_

Priority

High - Significant impact on productivity

Feature Category

CLI commands and flags

Use Case Example

_No response_

Additional Context

_No response_