[BUG] Interactive session refuses to prompt for trust for projects with settings.json saying the session is not interactive

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?

When I run claude from the terminal in a folder with a settings.json in the .claude directory it says:

Ignoring 20 permissions.allow entries from .claude/settings.json: this workspace has not been trusted. Run Claude Code interactively here once and accept the trust dialog, or set projects["<folder removed>].hasTrustDialogAccepted: true in ~/.claude.json.

But I am running interactively.

What Should Happen?

It should prompt for trust

Error Messages/Logs

Steps to Reproduce

1. create a folder in macOS and add .claude/settings.json with at least one allow statement
2. Launch claude from terminal

Claude Model

Opus

Is this a regression?

Yes, this worked in a previous version

Last Working Version

2.1.191

Claude Code Version

2.1.196

Platform

Anthropic API

Operating System

macOS

Terminal/Shell

Terminal.app (macOS)

Additional Information

_No response_