[FEATURE] Read VS Code terminal output (like Copilot's #terminalLastCommand)

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

Claude Code (VS Code extension) cannot read the existing terminal output. When a user runs a command that produces errors, they must manually copy-paste the output into the chat. This adds friction to the debugging workflow and breaks the natural "run → see error → ask Claude" loop.

Proposed Solution

Leverage the VS Code terminal buffer API to allow Claude Code to passively read the active terminal's recent output — similar to how GitHub Copilot uses the #terminalLastCommand context variable. This would let users simply say "fix the error in the terminal" without any manual copy-pasting.

Alternative Solutions

_No response_

Priority

High - Significant impact on productivity

Feature Category

Other

Use Case Example

1. User runs npm run build and gets a TypeScript compilation error
2. User types: "fix the error from my terminal"
3. Claude Code reads the terminal output directly, identifies the error, and applies the fix — no copy-paste needed

Additional Context

1. GitHub Copilot already supports this via VS Code's Terminal API and the #terminalLastCommand context variable, so the VS Code API surface exists and is proven
2. This would bring Claude Code's VS Code extension to feature parity with Copilot on terminal awareness
3. Affects all users who use the integrated VS Code terminal for running builds, tests, scripts, or any CLI tool