GUI panel "Switch back in Settings" link freezes editor on Cursor (claudeCode.useTerminal deep-link hang)

Summary

Clicking the "Switch back in Settings" link in the Claude Code GUI panel reproducibly freezes the entire editor (extension host hang) on Cursor. Recovery requires Force Quit. Reproducible every time.

Environment

• Editor: Cursor (VS Code fork), macOS (Darwin 25.5.0)
• Extension: Claude Code for VS Code v2.1.186
• Model shown in panel: Opus 4.8 (1M context)

Steps to Reproduce

1. Open the Claude Code GUI panel (the sidebar chat view, not the terminal CLI).
2. At the bottom of the panel, the banner reads: "Prefer the Terminal experience? Switch back in Settings."
3. Click the "Switch back in Settings" link.
4. The link deep-links the Settings UI to claudeCode.useTerminal. The Settings pane renders blank, and the editor becomes fully unresponsive (mouse + keyboard).

Expected

Settings UI opens to the claudeCode.useTerminal toggle, editor stays responsive.

Actual

Extension host / UI thread hangs. Editor must be Force Quit (⌥⌘Esc) to recover. Bug reproduces on every click of the link.

Workaround

Set the value directly in settings.json instead of using the link:

"claudeCode.useTerminal": true

(⇧⌘P → "Preferences: Open User Settings (JSON)"). Avoids the Settings-UI deep-link path entirely.

Notes

• Likely specific to the Settings-UI deep-link + webview combination on the Cursor fork. Have not confirmed on stock VS Code.