[BUG] DISABLE_TELEMETRY / DO_NOT_TRACK / CLAUDE_CODE_DISABLE_NONESSENTIAL_TRAFFIC silently disable terminal mouse click interaction

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?

Setting any of these three telemetry/privacy env vars in the env block of ~/.claude/settings.json silently disables terminal mouse click interaction in the TUI. After enabling any one of them and restarting Claude Code, clicking on collapsible content (diff blocks, thinking blocks, long-output folds, file attachments) becomes completely unresponsive — the click is silently dropped, with no visual feedback.

Keyboard shortcuts still work (e.g. Ctrl+O expands a folded block), so the expand/collapse logic itself is functional. Only the mouse click event path is broken. This couples two unrelated concerns: disabling telemetry/privacy should not disable local terminal mouse interaction.

What Should Happen?

DO_NOT_TRACK / DISABLE_TELEMETRY / CLAUDE_CODE_DISABLE_NONESSENTIAL_TRAFFIC should disable telemetry, analytics, and non-essential network traffic only. Terminal mouse click interaction (a purely local UI concern) should continue to work.

Error Messages/Logs

No error message or log line is produced. The failure is entirely silent — a mouse click on a collapsible block produces no output, no feedback, and nothing in the debug log.

Steps to Reproduce

Setup: Start with a ~/.claude/settings.json whose env block contains only the ANTHROPIC_* variables (no disable flags). Launch claude, let it produce a collapsible block (e.g. an Edit-tool diff), and confirm mouse click expands it.

Test: For each row below, add ONLY that one env var to the env block, fully exit Claude Code, relaunch, and test mouse click on a collapsible block:

| Env var added (value "1") | Mouse click to expand |
|---|---|
| CLAUDE_CODE_DISABLE_NONESSENTIAL_TRAFFIC | broken |
| DO_NOT_TRACK | broken |
| DISABLE_TELEMETRY | broken |
| DISABLE_ERROR_REPORTING | works |
| DISABLE_AUTOUPDATER | works |
| DISABLE_BUG_COMMAND | works |
| CLAUDE_CODE_DUMMY_TEST (control — non-existent var) | works |

Each flag was tested individually with a clean baseline between tests. The three telemetry/privacy flags all reproduce the regression; the three other DISABLE_* flags do not; and a control variable (which Claude Code does not read) does not. This rules out "the act of adding any env var" as the cause and isolates it to the three specific flags.

Example minimal settings.json that triggers the bug:

{
  "env": {
    ...
    "DO_NOT_TRACK": "1"
  }
}

Additional observations:

• Reproduces in a brand-new empty session (not session-length related).
• Reproduces both inside tmux and in a bare gnome-terminal (not tmux-related).
• Keyboard Ctrl+O still expands folded blocks while mouse click is dead → the expand feature is disabled at the mouse-event path, not the expand logic.

Claude Model

_No response_

Is this a regression?

I don't know

Last Working Version

_No response_

Claude Code Version

2.1.198 (Claude Code)

Platform

Other

Operating System

Ubuntu/Debian Linux

Terminal/Shell

Xterm

Additional Information

Could the team confirm whether disabling terminal mouse interaction under the privacy level is intentional? If not, I'd expect mouse click handling to be excluded from the privacy-level gate so that DO_NOT_TRACK / DISABLE_TELEMETRY users keep a working TUI. Happy to provide more repro detail or test on other terminals if useful.