Terminal UI flickers when VS Code extension sends frequent file context updates

Description

When the VS Code Claude Code extension (anthropic.claude-code) is installed and a file is open in VS Code, the terminal-based Claude Code CLI displays a context line like:

⧉ In case-study-risk-skills-hub.md

This line appears at the bottom of the terminal, on a separate line below the ⏵⏵ accept edits on (shift+tab to cycle) prompt line.

Bug

The file context line (⧉ In ...) rapidly appears and disappears (~0.1s interval), causing the terminal content height to constantly change. This makes the entire terminal window visually jump/flicker, which is very disruptive.

The flickering occurs even when:

• The file is in a completely different directory from the current working directory
• The file is just passively open in a VS Code tab (no active editing)
• Obsidian (local app) is closed — only VS Code triggers it

Steps to Reproduce

1. Install the anthropic.claude-code VS Code extension
2. Open a markdown file in VS Code (e.g., case-study-risk-skills-hub.md)
3. In a separate terminal (iTerm2 on macOS), run claude to start a CLI session
4. Observe the bottom of the terminal — the ⧉ In <filename> line flickers rapidly

Expected Behavior

The file context indicator should either:

• Use a fixed layout slot (reserve space even when empty) to prevent height changes
• Debounce the IDE file context updates to avoid rapid show/hide cycles
• Display on the same line as the mode indicator instead of a separate line

Actual Behavior

The ⧉ In <filename> line is rendered on its own line and toggles visibility at ~0.1s intervals, causing the entire terminal content to shift up/down repeatedly.

Environment

• macOS (Darwin 25.4.0)
• Terminal: iTerm2
• Claude Code CLI (terminal mode)
• VS Code with anthropic.claude-code extension

Workaround

Uninstall the VS Code extension (code --uninstall-extension anthropic.claude-code) or close the file in VS Code.