[BUG] Cowork: \outputs directory not created, causes immediate crash (Pro account)

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?

Every Cowork session crashes immediately on first message with "Claude Code process exited with code 1". The VM boots successfully, network connects, and the SDK installs, but the process exits within seconds because a required working directory was never created on disk.

What Should Happen?

Cowork should successfully start a session, create the session's outputs working directory, and allow Claude Code to run normally - as it does when logged into the same Desktop install with an Enterprise account.

Error Messages/Logs

[warn] [HostLoop] cli.js stderr: Error: Can't access working directory C:\Users\jonm\AppData\Roaming\Claude\local-agent-mode-sessions\f19957d5-9b7a-4026-b942-7290ec05a6fb\d61985b7-2fa4-4530-94f1-23a2f7c035c2\local_0a949bc1-526e-46c2-af2d-9a8f7b1d9bd9\outputs: Path "...\outputs" does not exist

[error] Sentry caught: { value: 'write EOF', ... }

[error] Session local_0a949bc1-526e-46c2-af2d-9a8f7b1d9bd9 query error: Claude Code process exited with code 1

[info] [CycleHealth] Unhealthy cycle: { unhealthy_reason: 'system_error', error_message: 'Claude Code process exited with code 1', error_category: 'process_crashed', had_first_response: false }

Steps to Reproduce

1. Log into Claude Desktop (Windows) with a Pro account
2. Open Cowork and send any message to start a new task
3. Session initializes: VM boots, network connects (REACHABLE), SDK installs (v2.1.170)
4. Within ~8 seconds, session fails with "Claude Code process exited with code 1"

Checked the session folder directly:
C:\Users\jonm\AppData\Roaming\Claude\local-agent-mode-sessions\<id>\<id>\local_<id>\

• Contains only a .claude folder
• The outputs subfolder referenced in the error was never created

Note: The same Desktop install (1.12603.1.0) works correctly when logged in with an Enterprise account on this same machine.

Claude Model

Sonnet (default)

Is this a regression?

Yes, this worked in a previous version

Last Working Version

_No response_

Claude Code Version

2.1.170

Platform

Anthropic API

Operating System

Windows

Terminal/Shell

Other

Additional Information

_No response_