[BUG] Cowork: new projects lost "Choose a folder" — Context menu replaced with Chat-style upload-only knowledge menu after Chat/Cowork merge

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?

Summary

Since the Chat/Cowork merge rollout (~July 8–9, 2026), newly created projects no longer offer the "Choose a folder" option in the Context panel. The Cowork-native context menu has been replaced wholesale with the Chat-style project knowledge menu, which only supports static context (file uploads, pasted text, GitHub/Drive/Notion imports). There is no way to link a local folder to a new project for dynamic, living-file context.

Projects created before the merge retain the old menu and their linked folders (grandfathered).

Steps to Reproduce

1. Claude Desktop on macOS, post-merge build (merge rolled out ~July 8–9, 2026)
2. Create a new project
3. In the project view, click the + next to Context
4. Observe the menu options

Actual Behavior

Context "+" menu on new projects shows only:

• Upload from device
• Add text content
• GitHub
• Drive
• Notion

This is the Chat project "knowledge" menu (static snapshot context). "Choose a folder" is absent entirely — this is not a folder-picker validation failure; the menu itself is different. Even the Context empty-state copy is Chat's ("Add PDFs, docs…").

Comparison (screenshots attached)

• Screenshot 1 — pre-merge project: Context "+" → Choose a folder / Drive / Add a link. Multiple locally linked folders visible and working in the Context list.
• Screenshot 2 — project created post-merge: Context "+" → Upload from device / Add text content / GitHub / Drive / Notion. No folder option.

Why This Matters

Linking a folder (dynamic context tied to living files, e.g. Obsidian vaults that sessions read and write) is categorically different from uploading files (static snapshot). Folder-linked projects are the core Cowork workflow; new projects currently cannot use it at all.

Environment

• OS: macOS (Apple Silicon MacBook Pro)
• App: Claude Desktop, post-merge build (auto-updated ~July 9, 2026)
• Regression: Yes — worked until the Chat/Cowork merge rollout; discovered July 10, 2026

Related Issues (same rollout window)

• #76604 — Cowork broken since Chat/Cowork merge: projects disappear within 24h
• #76254 — trusted-folder validation rejects previously-accepted folders since ~July 9 update; existing grants grandfathered
• #76344 — connected folders no longer writable-mounted since mandatory write-consent change (~July 8)
• #76573 — cannot remove a project's original folder from context

Notes

• Pre-merge projects keep the old Context menu and their folder links — consistent with grandfathered grants noted in #76254. (Users should be warned not to unlink folders from old projects, since re-adding appears impossible in new-style projects.)
• In-session "Add folder" (session-level device bridge) still functions, but is per-session and not persisted as project context — a partial workaround, not a substitute.

<img width="1306" height="735" alt="Image" src="https://github.com/user-attachments/assets/7f88c241-fdc5-47ac-8371-e30ec5d02a69" />
<img width="1306" height="735" alt="Image" src="https://github.com/user-attachments/assets/c79bfe70-8e5b-4950-b5f7-c4e170451083" />

What Should Happen?

The Context "+" menu on a newly created project should offer Choose a folder (link a local folder on this computer as live, dynamic project context), plus Drive and Add a link — exactly as pre-merge projects still show, and as documented in the support article "Organize your tasks with projects in Claude Cowork" ("Use an existing folder on your computer").

Error Messages/Logs

Steps to Reproduce

1. Use Claude Desktop on macOS with a post-merge build (auto-updated during the Chat/Cowork merge rollout, ~July 8–9, 2026)
2. Create a new project
3. In the project view, click the + button next to Context
4. Observe the menu: Upload from device / Add text content / GitHub / Drive / Notion — "Choose a folder" is absent
5. For comparison, open any project created before the merge and click the same + next to Context: the menu shows Choose a folder / Drive / Add a link, and previously linked local folders are still listed and working

Result: there is no way to link a local folder (dynamic, living-file context) to any newly created project — only static uploads/imports.

Claude Model

None

Is this a regression?

Yes, this worked in a previous version

Last Working Version

Pre-merge Claude Desktop build (working as of July 7, 2026)

Claude Code Version

1.20186.1 (df1d8a)

Platform

Other

Operating System

macOS

Terminal/Shell

Other

Additional Information

Note on scope: This is a Claude Desktop (Cowork) issue, not the Claude Code CLI — filed here because Cowork/desktop regressions from the same rollout are tracked in this repo with the area:cowork / area:desktop labels (e.g. #76604, #76254, #76344, #76573). The "Claude Code Version" field below therefore contains the Claude Desktop app version.

Screenshots: two attached above in "What's Wrong?" — (1) a pre-merge project's Context "+" menu showing "Choose a folder", (2) a post-merge new project's Context "+" menu showing the upload-only Chat-style options.

Documentation reference: the Claude Help Center article "Organize your tasks with projects in Claude Cowork" still documents "Use an existing folder on your computer" as a context option for projects.