[BUG] Repeated "API Error: 529 Overloaded" and "Response stalled mid-stream" failures during long/parallel sessions on a self-hosted VPS (Claude Max login)

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?

Two related failures on 2026-07-30, running Claude Code on a self-hosted Linux VPS, logged in via claude.ai OAuth (Max plan, rateLimitTier=default_claude_max_5x), while running several concurrent Claude Code sessions (each in its own git worktree):

1) "API Error: 529 Overloaded. This is a server-side issue, usually temporary — try again in a moment. If it persists, check https://status.claude.com."
Occurred 15 times across 3 separate concurrent sessions, clustered between 05:56 UTC and 09:40 UTC.

2) "API Error: Response stalled mid-stream. The response above may be incomplete."
Occurred twice in one session (14:25:14Z and 14:40:36Z), during a long tool-call-heavy turn (many sequential Bash/Read calls, high reasoning effort setting).

What Should Happen?

No server-side overload/stream-stall errors should surface to the user under normal Max-plan usage, or at minimum the client should transparently retry/resume the stream so no output is silently lost.

Error Messages/Logs

Error Messages/Logs
API Error: 529 Overloaded. This is a server-side issue, usually temporary — try again in a moment. If it persists, check https://status.claude.com.

API Error: Response stalled mid-stream. The response above may be incomplete.

Timestamps (UTC): 05:56:48, 05:57:33, 06:00:54 (x2), 06:31:00, 06:49:20, 09:40:13, 14:25:14, 14:40:36

Steps to Reproduce

1. Log in to Claude Code via claude.ai OAuth (Max plan) on a self-hosted VPS.
2. Run several Claude Code sessions concurrently, each in a separate git worktree.
3. In at least one session, run a long turn with many sequential tool calls (Bash/Read) at high reasoning effort.
4. Errors above appear intermittently; not consistently reproducible on demand.

Claude Model

Opus

Is this a regression?

No, this never worked

Last Working Version

_No response_

Claude Code Version

2.1.220 (Claude Code)

Platform

Anthropic API

Operating System

Ubuntu/Debian Linux

Terminal/Shell

VS Code integrated terminal

Additional Information

Auth: claude.ai OAuth (not a raw API key). Running as a self-hosted setup on a Hostinger VPS with multiple parallel git-worktree sessions active simultaneously.