[BUG] ANTHROPIC_MODEL env var does not override `model` setting in VSCode extension

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?

The docs at https://code.claude.com/docs/en/env-vars state:

"Where the same behavior has both an environment variable and a settings field, the environment variable takes precedence. For example, ANTHROPIC_MODEL overrides the model setting."

In the VSCode extension, ANTHROPIC_MODEL does NOT override the model key in settings.json, regardless of how the env var is set. I tested three approaches — none override model:

1. env block in ~/.claude/settings.json — confirmed via printenv that ANTHROPIC_MODEL is set, but model wins
2. claudeCode.environmentVariables in VSCode settings — using the correct {name, value} object format per the extension's package.json schema — still doesn't override model
3. Both simultaneously — still doesn't override

Additionally, the VSCode UI model picker writes every selection back to the model key in settings.json, and there is no /model command available in the VSCode extension (it's CLI-only). This means there is no way to make a session-only model switch without permanently changing the default for all future chats.

What Should Happen?

ANTHROPIC_MODEL set via claudeCode.environmentVariables (or the env block in settings.json) should override the model setting, as documented. Alternatively, the VSCode extension should support /model for session-only switches that don't persist to settings.json.

Error Messages/Logs

No error — the env var is silently ignored for model selection.

Confirmed ANTHROPIC_MODEL is set in the process environment:
$ printenv | grep ANTHROPIC_MODEL
ANTHROPIC_MODEL=claude-opus-4-6[1m]

Yet new chats default to whatever `model` is set to in settings.json (e.g. "haiku").

Steps to Reproduce

1. In ~/.claude/settings.json, set "model": "haiku"
2. In the same file, set "env": { "ANTHROPIC_MODEL": "claude-opus-4-6[1m]" }
3. In VSCode settings, set "claudeCode.environmentVariables": [{ "name": "ANTHROPIC_MODEL", "value": "claude-opus-4-6[1m]" }]
4. Reload VSCode window (Cmd+Shift+P → "Developer: Reload Window")
5. Open a new Claude Code chat
6. Observe: model picker shows "Haiku", not Opus

Expected: ANTHROPIC_MODEL should override model per the docs.

Claude Model

Not sure / Multiple models

Is this a regression?

I don't know

Last Working Version

_No response_

Claude Code Version

2.1.181

Platform

Anthropic API

Operating System

macOS

Terminal/Shell

VS Code integrated terminal

Additional Information

The combination means there is no way to set a persistent default model that survives UI model switches. The env var was the intended mechanism per the docs, but it doesn't work.

VSCode version: 1.100.x (macOS, Apple Silicon)
Extension: anthropic.claude-code 2.1.181-darwin-arm64