Infinite loop on all requests - Windows 11 v2.0.1

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?

Subject: Claude Code v2.0.1 - Infinite Loop on All Requests (Windows 11)
Environment:

OS: Windows 11
Node.js: v22.17.1
VSCode: Version: 1.104.2 (user setup)
Commit: e3a5acfb517a443235981655413d566533107e92
Date: 2025-09-24T11:21:37.073Z
Electron: 37.3.1
ElectronBuildId: 12404162
Chromium: 138.0.7204.235
Node.js: 22.18.0
V8: 13.8.258.31-electron.0
OS: Windows_NT x64 10.0.26100
Claude Code Extension: v2.0.1
API Key: Configured and valid (tested successfully via web interface)

Issue Description:
Claude Code extension enters an infinite processing loop on all requests and becomes completely unresponsive. The extension displays rotating status messages ("Churning...", "Contemplating...", "Vibing...", etc.) indefinitely without ever completing any request or returning a response.
Specific Symptoms:

Any message sent to Claude Code triggers the infinite loop
Stop button is non-functional - cannot cancel stuck requests
Extension remains stuck until VSCode is force-closed
JavaScript error observed in Developer Console: "e is not iterable"
Extension logs show MCP server connection but no API communication

Configuration Verified:
json"claude-code.environmentVariables": [
"ANTHROPIC_API_KEY=sk-ant-api03-[key]"
]
Troubleshooting Steps Completed:

Multiple clean reinstalls of extension
Cleared all VSCode cache directories
Tested both v2.0.1 and v1.0.128
Disabled antivirus/firewall (Norton)
Verified API key works via claude.ai web interface
Checked for extension conflicts (GitHub Copilot disabled)
No workspace-level settings conflicts
Verified correct array format for environmentVariables in v2.0.1

Request:
Assistance in resolving this issue or workaround to use Claude Sonnet 4.5 in VSCode for large project development.

What Should Happen?

Claude Code should process requests and return responses normally. The extension should allow users to interact with Claude Sonnet 4.5 for code assistance without entering infinite loops, and the stop button should successfully cancel requests when needed.
Or more briefly:
Expected Behavior:
Extension processes requests and returns responses without hanging. Stop button successfully cancels operations.

Error Messages/Logs

Error Messages/Logs:
JavaScript Console Error:
e is not iterable
VSCode Output Log (Claude Code channel):
2025-09-30 10:43:29.726 [info] Claude code extension is now active
2025-09-30 10:43:29.726 [info] MCP Server running on port 46694 (localhost only)
2025-09-30 10:43:34.489 [info] New WS connection from: /
2025-09-30 10:43:34.489 [info] MCP server connected to transport
2025-09-30 10:43:35.004 [info] Logging event: run_claude_command undefined
2025-09-30 10:43:35.417 [info] Closing all diff tabs in the editor...
2025-09-30 10:43:35.417 [info] Closed 0 diff tabs.
[Loop continues with repeated "Closing all diff tabs" messages but no API communication]
Observations:

No API requests or responses logged
MCP server connects successfully but no subsequent API activity
Extension appears to attempt operations but never completes them
User interface shows rotating status messages indefinitely

Steps to Reproduce

Install Claude Code v2.0.1 in VSCode on Windows 11
Configure API key in settings.json:

json "claude-code.environmentVariables": [
"ANTHROPIC_API_KEY=sk-ant-api03-[valid-key]"
]

Restart VSCode
Open Claude Code interface
Send any message (e.g., "Hi")
Observe infinite loop with rotating status messages ("Churning...", "Contemplating...", etc.)
Attempt to click stop button - it does not stop the process
Extension remains stuck indefinitely until VSCode is force-closed

Expected Result:
Claude Code processes the request and returns a response within a reasonable time.
Actual Result:
Extension enters infinite loop, never completes request, stop button non-functional.
Note: Downgrading to v1.0.128 resolves the issue completely - the problem is specific to v2.0.1 (and likely v2.0.0).

Claude Model

Sonnet (default)

Is this a regression?

Yes, this worked in a previous version

Last Working Version

_No response_

Claude Code Version

2.0.1 (Claude Code)

Platform

Anthropic API

Operating System

Windows

Terminal/Shell

VS Code integrated terminal

Additional Information

Additional Information:

v1.0.128 works correctly
v2.0.1 has infinite loop issue
Regression introduced between these versions

Workaround:
Users experiencing this issue can downgrade to v1.0.128 using:
npm install -g @anthropic-ai/claude-code@1.0.128