VS Code extension: session titles are no longer auto-generated (new sessions keep the raw first-message text as their name)

Environment

• Windows 11 Pro (build 10.0.26200)
• VS Code 1.130.0
• Claude Code extension (anthropic.claude-code) v2.1.220

What happens
Session titles used to be auto-generated — each new session got a short, meaningful AI-generated name. At some point this stopped entirely: every new session now permanently shows the beginning of the first user message as its title, and no generated title ever replaces it. I have to rename every session by hand.

The change roughly coincided with manually renaming one session's title once, though I cannot prove that was the trigger.

Already tried

• Full VS Code restart (not just a window reload)
• Updating the extension to the current version (2.1.220)

Neither helped.

Expected
New sessions receive an AI-generated title based on the first message, as the documentation describes.

Actual
No session ever receives a generated title; the raw first-message excerpt stays until renamed manually.