[BUG] `claudeCode.disableLoginPrompt`:`true` not being respected in VS code extension

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?

I have "claudeCode.disableLoginPrompt": true set in my user settings.json file in VS Code, however the Claude Code extension still prompts me to login each time.

I have tried reinstalling the extension. When I do this, I can see my previous chats in the repository for a few seconds before the login prompt reappears. I authenticate via a third party and cannot find any other documentation that indicates a missing step here.

<img width="665" height="711" alt="Image" src="https://github.com/user-attachments/assets/f4b230df-3511-4d1b-b9df-0fbb2784314b" />

What Should Happen?

I should not be prompted to login in the Claude Code extension

Error Messages/Logs

Steps to Reproduce

1. Open VS code
2. Set claudeCode.disableLoginPrompt to true in user settings
3. Open Claude Code extension

Claude Model

_No response_

Is this a regression?

I don't know

Last Working Version

_No response_

Claude Code Version

2.1.185

Platform

Other

Operating System

macOS

Terminal/Shell

Other

Additional Information

_No response_