[BUG] Cowork tab refuses all tasks with "API Error: Usage credits required for 1M context"

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?

Mac, latest Desktop app
Cowork tab refuses all tasks with "API Error: Usage credits required for 1M context"
No task is large enough to warrant 1M context — it's happening on task submission, not mid-task

What Should Happen?

Expected: fall back to standard context when credits are off

Error Messages/Logs

API Error: Usage credits required for 1M context · turn on usage credits at claude.ai/settings/usage, or use --model to switch to standard context

Steps to Reproduce

Any task/query to Cowork currently gives me this error

Claude Model

Sonnet (default)

Is this a regression?

I don't know

Last Working Version

_No response_

Claude Code Version

2.1.186

Platform

Anthropic API

Operating System

macOS

Terminal/Shell

Terminal.app (macOS)

Additional Information

_No response_