[BUG] Cowork: all tasks fail with retry loop then ECONNRESET — fails across networks incl. phone hotspot, survived clean reinstall, worked hours earlier same day (macOS 15.7.3, M3)

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 task fails with "Server is busy. Retrying in Ns (attempt N of 10)" followed by API Error: Unable to connect to API (ECONNRESET). Regular Chat mode works perfectly on the same machine and session. Claude Code SDK inside the VM is v2.1.170.
Key facts that make this case unusual:

Cowork worked successfully earlier the same day (June 12) on a different network. It then failed identically that evening on two independent networks: home WiFi and an iPhone hotspot.
A similar episode occurred several weeks earlier on a different network in a different country (US; current failures are in Europe), so this is recurring, not a one-off.
The failure survived a full clean uninstall (via AppCleaner, including the ~13.7 GB Application Support folder and VM bundles) and fresh reinstall with fresh rootfs download.
Failure is independent of model (tested Fable and Opus) and task size (a trivial "reply with the word hello" task fails identically).
VM bootstrap is fully healthy. From coworkd.log: static IP configured (172.16.10.3/24), MTU lowered to 1400, 9 host CA certificates installed, MITM proxy started, reachability check to https://api.anthropic.com/ passes (status=404), SDK installed successfully.
main.log for a failed task shows had_first_response: true, seconds_to_outcome: 186, transcript_size_bytes: 21399, unhealthy_reason: 'api_error', error_message: 'API Error: Unable to connect to API (ECONNRESET)' — the task reached the API and exchanged data before the connection was reset.

Ruled out by testing:

Host connectivity: curl -I https://api.anthropic.com → HTTP/2 404 with cf-ray, on every network tested
VPN: none. macOS Application Firewall: off. No third-party network filters (Little Snitch/LuLu not installed)
System extensions: systemextensionsctl list (with sudo) → 0 extensions. Not MDM-enrolled (profiles status -type enrollment → No/No). No hosts-file blocking
Network-specific cause: fails on home WiFi AND iPhone hotspot the same evening; previously failed on a different network in another country
Local state/install: identical failure before and after complete clean reinstall
Server outage: status page showed no active incident at time of testing (resolved incidents Jun 9–11 only)
Note: macOS Screen Time content restrictions are enabled on this machine (used to block YouTube; always-on, unchanged config) — but they were equally active during the successful session earlier the same day

Possibly irrelevant but included for completeness: the entitlement dump of Claude.app shows com.apple.security.virtualization but no com.apple.vm.networking. The VM's reachability check passes, so this may not matter.

What Should Happen?

Cowork tasks should connect and complete, the same way Chat mode works without issues on the same machine.

Error Messages/Logs

UI: Server is busy. Retrying in 8s (attempt 6 of 10)
Final: API Error: Unable to connect to API (ECONNRESET)
main.log excerpt:
cli_session_id: '491a9ad6-ec59-4992-85e3-741ed4cd41d9',
user_message_uuid: '2e953991-bbf6-40d3-945e-de4c8aa8b311',
cycle_health: 'unhealthy',
had_first_response: true,
seconds_to_outcome: 186,
is_resume: false,
unhealthy_reason: 'api_error',
error_message: 'API Error: Unable to connect to API (ECONNRESET)',
transcript_size_bytes: 21399
coworkd.log (VM bootstrap, all healthy):
[coworkd] configuring static IP on enp0s1: 172.16.10.3/24 gateway=172.16.10.1 dns=172.16.10.1
[coworkd] lowered MTU from 1500 to 1400 on enp0s1
[coworkd] installed 9 host CA certificates
[coworkd] checking reachability https://api.anthropic.com/ (timeout=30s)
[coworkd] reachability check passed (status=404)
[coworkd] connected, waiting for commands
[coworkd] installed SDK binary v2.1.170 to /usr/local/bin/claude

Steps to Reproduce

1. Open Claude Desktop 1.12603.1 on macOS 15.7.3, sign in (Max plan)
2. Switch to Cowork tab, start any task — even "reply with the word hello"
3. Task shows retry loop: "Server is busy. Retrying in Ns (attempt N of 10)"
4. After 10 attempts, fails with: API Error: Unable to connect to API (ECONNRESET)
5. Reproduces on home WiFi and iPhone hotspot; with Fable and Opus; before and after clean reinstall
6. Chat mode works perfectly throughout

Claude Model

Not sure / Multiple models

Is this a regression?

Yes, this worked in a previous version

Last Working Version

_No response_

Claude Code Version

Claude 1.12603.1 (3df4fd) 2026-06-11; SDK in VM v2.1.170

Platform

Other

Operating System

macOS

Terminal/Shell

Terminal.app (macOS)

Additional Information

_No response_