[Bug] Extremely slow initial API response in large project folders with multiple MCP servers and skills

Bug Description
Extremely slow first response (45s to 8+ min) in a large project folder, while a small folder responds instantly.

Environment:

• Claude Code v2.1.223 (CLI and VS Code extension), Claude Max plan
• macOS 26 (Tahoe), Apple Silicon MacBook Pro
• Project folder on Google Drive (File Provider / ~/Library/CloudStorage/)
• Large project context: CLAUDE.md, 28 skills, MCP servers (Google Drive, Gmail, Calendar, Canva)

Symptoms:

• In the project folder, the FIRST message of a session takes 45 seconds to 8+ minutes, or appears to hang indefinitely. Subsequent messages in the same session are fast (5-15 seconds).
• In a small folder (~/Desktop), responses are instant. Same account, same network.
• The VS Code extension chat panel is effectively unusable (hangs on every message, stop button unresponsive).
• With Fable 5 the first response never arrived even after 8 minutes; switching to Opus 5 improved it to ~45s-4min.
• Debug log shows successful MCP connections and skill loading with no errors, then only "Fast mode unavailable: Fast mode requires usage credits" repeating every 15-20 seconds while waiting for the API response.
• Interrupting with Esc sometimes causes the pending response to appear immediately.

Tried without effect:

• Full reinstall of the VS Code extension
• Removing/restoring the 586MB project history in ~/.claude/projects
• Re-login via /usage-credits (login succeeded, symptom unchanged)
• Launching VS Code with --disable-extensions
• env TERM_PROGRAM= claude inside VS Code terminal
• Verified all project files are locally materialized (no File Provider placeholders)

Expected: First response time comparable to small projects, or at least a progress indicator distinguishing "processing large context" from a hang. Also expected the VS Code extension to work as the CLI does.

Environment Info

• Platform: darwin
• Terminal: Apple_Terminal
• Version: 2.1.223
• Feedback ID: 0180beb4-0428-4307-96c2-aad60f8c9177

Errors

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