VS Code extension: AskUserQuestion dialog covers the assistant message it refers to, with no way to read the text underneath

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?

When Claude asks a multiple-choice question (AskUserQuestion tool) in the VS Code extension chat panel, the question dialog renders as an overlay on top of the chat transcript. The dialog covers the assistant message directly beneath it — which is usually the explanation/context for the question itself — and there is no way to read that text while the dialog is open:

The dialog cannot be moved, resized, or collapsed.
The chat transcript cannot be scrolled while the dialog is open.
The only way to read the covered text is to press Esc and cancel the question, losing the clickable options.
This is especially bad because the covered message typically contains exactly the information needed to answer the question (comparison tables, option explanations, etc.). Screenshot attached: a comparison table of notification channels is hidden behind the question asking which channel to choose.

<img width="720" height="451" alt="Image" src="https://github.com/user-attachments/assets/85cae97f-5b9e-4324-9165-d61583b4a98c" />

What Should Happen?

Be able to read the full assistant message while the question dialog is open — e.g., make the dialog draggable/collapsible, allow scrolling the transcript behind it, dock the dialog at the bottom of the panel instead of overlaying content, or auto-scroll so the related message stays visible above the dialog.

Error Messages/Logs

Steps to Reproduce

Open the Claude Code extension chat panel in VS Code.
Send a prompt that makes Claude ask a multiple-choice question right after a long explanatory message. For example: "Compare 4 notification channel options for collecting user feedback in a detailed table, then ask me to pick one using a multiple-choice question."
Claude writes the explanation/comparison table, then the AskUserQuestion dialog ("Submit answers / Esc to cancel") appears as an overlay in the chat panel.
Try to read the assistant message behind the dialog:
Try scrolling the chat transcript — it doesn't scroll while the dialog is open.
Try moving, resizing, or collapsing the dialog — none of these are possible.
Observe: the only way to read the covered text is to press Esc, which cancels the question and loses the clickable options.
Result: The dialog covers the explanation needed to answer the question, and there is no way to view it without dismissing the dialog.

Expected: The full assistant message remains readable while the dialog is open (draggable/collapsible dialog, scrollable transcript behind it, or the dialog docked below the message instead of overlaying it).

Claude Model

claude-fable-5

Is this a regression?

N/A

Last Working Version

_No response_

Claude Code Version

2.1.37

Platform

Anthropic API

Operating System

Windows

Terminal/Shell

VS Code integrated terminal

Additional Information

_No response_