[Bug] Anthropic API Error: Image Exceeds 5 MB Size Limit breaks session for subsequent text prompts. Also breaks --continue mode if exit/re-enter.

Bug Description
I'm pasting a moderately sized image with ctrl-v into claude code under iterm2 on macos 26, it doesn't happen all the time but now the session is broken showing this error below even for text followup prompts. I'm using 1.0.124 recent and latest available Claude Code

[Image #1]
⎿ API Error: 400 {"type":"error","error":{"type":"invalid_request_error","mes
sage":"messages.162.content.0.image.source.base64: image exceeds 5 MB
maximum: 7414068 bytes > 5242880
bytes"},"request_id":"req_011CTVuyg3xTNRz7JbtSipMp"}

or as "foreground"

⎿ API Error: 400 {"type":"error","error":{"type":"invalid_request_error","mes
sage":"messages.162.content.0.image.source.base64: image exceeds 5 MB
maximum: 7414068 bytes > 5242880
bytes"},"request_id":"req_011CTVuzDYY1agCET9BJfZ31"}

try this [Image #1]

⎿ API Error: 400 {"type":"error","error":{"type":"invalid_request_error","mes
sage":"messages.162.content.0.image.source.base64: image exceeds 5 MB
maximum: 7414068 bytes > 5242880
bytes"},"request_id":"req_011CTVv1u9otVXKRRRwi1j5b"}

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max Sonnet 4|4-20250514 ~/hobby/mac/cfin 69440 tokens
[git:main|~8?9] 1.0.124 [default] Thu Sep 25 18:33 current: 1.0.124 ·
⏵⏵ bypass permissions on (shift+tab to cycle) latest: 1.0.124

====
If I exit Claude Code and re-enter with --continue flag, it is still broken, so the only option is to clear context entirely:

look now I'm in claude code window and it's found but not marked as active

[Image #1]
⎿ API Error: 400 {"type":"error","error":{"type":"invalid_request_error","mes
sage":"messages.162.content.0.image.source.base64: image exceeds 5 MB
maximum: 7414068 bytes > 5242880
bytes"},"request_id":"req_011CTVuyg3xTNRz7JbtSipMp"}

or as "foreground"

⎿ API Error: 400 {"type":"error","error":{"type":"invalid_request_error","mes
sage":"messages.162.content.0.image.source.base64: image exceeds 5 MB
maximum: 7414068 bytes > 5242880
bytes"},"request_id":"req_011CTVuzDYY1agCET9BJfZ31"}

try this [Image #1]

⎿ API Error: 400 {"type":"error","error":{"type":"invalid_request_error","mes
sage":"messages.162.content.0.image.source.base64: image exceeds 5 MB
maximum: 7414068 bytes > 5242880
bytes"},"request_id":"req_011CTVv1u9otVXKRRRwi1j5b"}

/Users/max/.config/claude/mcp-config.json

⎿ API Error: 400 {"type":"error","error":{"type":"invalid_request_error","mes
sage":"messages.162.content.0.image.source.base64: image exceeds 5 MB
maximum: 7414068 bytes > 5242880
bytes"},"request_id":"req_011CTVvE82ntrwboH4GNNEzq"}

✻ Perusing… (esc to interrupt · 259s · ↑ 0 tokens)

───────────────────────────────────────────────────────────────────────────────

Try "edit claude_tracker.go to..."

───────────────────────────────────────────────────────────────────────────────
max Sonnet 4|4-20250514 ~/hobby/mac/cfin 69440 tokens
[git:main|~8?9] 1.0.124 [default] Thu Sep 25 18:36 current: 1.0.124 ·
⏵⏵ bypass permissions on (shift+tab to cycle) latest: 1.0.124

Environment Info

• Platform: darwin
• Terminal: iTerm.app
• Version: 1.0.124
• Feedback ID: 23b5636c-ac7c-4a42-9969-acee7375f236

Errors

[{"error":"Error: Could not load the \"sharp\" module using the darwin-arm64 runtime\nPossible solutions:\n- Ensure optional dependencies can be installed:\n    npm install --include=optional sharp\n- Ensure your package manager supports multi-platform installation:\n    See https://sharp.pixelplumbing.com/install#cross-platform\n- Add platform-specific dependencies:\n    npm install --os=darwin --cpu=arm64 sharp\n- Consult the installation documentation:\n    See https://sharp.pixelplumbing.com/install\n    at <anonymous> (/$bunfs/root/claude:111:38363)\n    at <anonymous> (/$bunfs/root/claude:12:839)\n    at <anonymous> (/$bunfs/root/claude:112:78)\n    at <anonymous> (/$bunfs/root/claude:12:839)\n    at <anonymous> (/$bunfs/root/claude:112:79845)\n    at <anonymous> (/$bunfs/root/claude:12:839)\n    at <anonymous> (/$bunfs/root/claude:663:1842)\n    at processTicksAndRejections (native:7:39)","timestamp":"2025-09-25T21:30:13.988Z"},{"error":"Error: Request was aborted.\n    at new K5 (unknown:1:28)\n    at new kY (/$bunfs/root/claude:863:1962)\n    at new F2 (/$bunfs/root/claude:863:2748)\n    at makeRequest (/$bunfs/root/claude:880:3864)\n    at processTicksAndRejections (native:7:39)","timestamp":"2025-09-25T21:36:13.021Z"},{"error":"TypeError: (Y.default||Y) is not a function. (In '(Y.default||Y)(Z)', '(Y.default||Y)' is an instance of Object)\n    at ul (/$bunfs/root/claude:663:1865)\n    at processTicksAndRejections (native:7:39)","timestamp":"2025-09-25T21:36:14.467Z"},{"error":"TypeError: (Y.default||Y) is not a function. (In '(Y.default||Y)(Z)', '(Y.default||Y)' is an instance of Object)\n    at ul (/$bunfs/root/claude:663:1865)\n    at processTicksAndRejections (native:7:39)","timestamp":"2025-09-25T21:42:09.551Z"},{"error":"TypeError: (Y.default||Y) is not a function. (In '(Y.default||Y)(Z)', '(Y.

Note: Error logs were truncated.