[BUG] Auto-accept is not working

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?

Claude Code is prompting for approval on every Edit operation despite having "auto-accept edits" enabled and Edit permissions configured correctly in settings.json. (Validated by Claude Code itself.)

I believe it started after upgrading to Claude Code 1.0.126.

What Should Happen?

Edit operations should be auto-approved when "auto-accept edits" is enabled and Edit is in the allow list.

Error Messages/Logs

(no error message, just prompts to continue)

Steps to Reproduce

1. Install Claude Code
2. Request to complete work
3. Claude Code processes request and asks to edit files:

> Opened changes in Visual Studio Code - Insiders ⧉
>
> Save file to continue…
>
> Do you want to make this edit to Capacity.ps1?
> 1. Yes
> 2. Yes, allow all edits during this session (shift+tab)
> 3. No, and tell Claude what to do differently (esc)

1. Select 2
2. Claude Code continues and then prompts to edit each file (sometimes the same file multiple times)

Claude Model

Sonnet (default)

Is this a regression?

Yes, this worked in a previous version

Last Working Version

2 versions ago (???)

Claude Code Version

1.0.126

Platform

Anthropic API

Operating System

macOS

Terminal/Shell

PowerShell

Additional Information

The permissions configuration hasn't changed. This appears to be a regression where the auto-accept edits setting is not being respected for Edit operations. I haven't noticed if it's explicitly working or not for other actions.