[Bug] LaTeX math corrupted by markdown escaping and not rendered in terminal output

Bug Description
Title: Terminal corrupts and does not render LaTeX math in assistant output

Environment: Claude Code CLI, Windows 11, PowerShell.

Summary: Assistant messages containing LaTeX math are (1) shown as raw source instead of rendered, and (2) silently corrupted by GitHub-flavored-markdown backslash-escaping applied before display, which mangles LaTeX spacing macros.

Repro & evidence:

1. Backslash-punctuation escaping (content corruption). The model emits $\forall\, \varepsilon$. It is displayed as $\forall, \varepsilon$ — the \, (LaTeX thin-space) has its backslash stripped, leaving a bare comma. Same failure for \;→;, \:→:, \!→!. Meanwhile \varepsilon, \forall, \ge keep their backslashes, because markdown only escapes ASCII punctuation, not letters. So the escaping is selective and corrupts exactly the spacing macros.
2. No math rendering. The model emits $$f(n) = 2n, \qquad g(n) = n.$$. It is displayed verbatim as raw source — $$, \qquad and all — with no math typesetting.

Expected: Either render $...$ / $$...$$ as math, or at minimum pass their contents through verbatim (no backslash-escaping) so the source can be copied into a LaTeX renderer intact.

Actual: Math is not rendered, and backslash-punctuation escapes inside math spans are stripped, silently corrupting the LaTeX. The model emits correct source and cannot see the corruption; the user gets stray punctuation.

Impact: Math-heavy responses are hard to read in-terminal, and — worse — copy-pasting the raw source into a real LaTeX engine yields wrong output wherever spacing macros were used, with no visible warning.

Suggested fix: Treat $...$ / $$...$$ as math spans: skip markdown backslash-escaping inside them, and ideally render them (or fall back to a Unicode/plaintext math presentation).

Environment Info

• Platform: win32
• Terminal: WezTerm
• Version: 2.1.218
• Feedback ID: f64b4b12-cf46-49b0-be57-0edbff64731e

Errors

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