Show file edits as inline diff in the editor tab (like GitHub Copilot)

Preflight Checklist

• [x] I have searched existing requests and this feature hasn't been requested yet
• [x] This is a single feature request (not multiple features)

Problem Statement

When Claude Code (VS Code extension) edits a file, the diff is only shown as a side-by-side comparison inside the Claude chat panel. To see exactly what changed in the file itself, I have to accept the change first and then open the Source Control view to view the git diff. There's no way to see red/green inline highlighting directly in the file's editor tab while reviewing the proposed change.

Proposed Solution

Please add an option to render Claude's proposed edits as an inline diff directly in the file's editor tab (red/green line highlighting inside the actual document), similar to how GitHub Copilot's inline chat/edit suggestions work in VS Code. Ideally this would open/focus the affected file and show the diff decorations in place, rather than (or in addition to) the diff shown in the chat panel.

Alternative Solutions

• Reviewing the diff in the chat panel modal before accepting.
• Accepting the change and then checking the Source Control (git) diff view afterward.

Both work, but neither gives an immediate, in-context view of the change while it's still pending approval — which makes it harder to review multiple edited files at a glance.

Priority

Critical - Blocking my work

Feature Category

CLI commands and flags

Use Case Example

_No response_

Additional Context

This would primarily help with quickly reviewing multi-file or larger edits, where switching between the chat panel and the file view (or the git diff) adds friction compared to an inline, in-editor diff.