[BUG] VS Code extension: chat input box expands after pasting a code block and won't shrink back down

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?

I pasted a prompt with a fenced code block (triple backticks) into the chat input, and the input box expanded to fit it. After that, I couldn't get it to shrink back down — not by deleting the content, not by dragging the divider, nothing worked. It just stays stuck at the larger size.

Other long content in the UI (e.g. long messages/tool output) gets a "Show less" toggle to collapse it back down. The expanded input box doesn't have any equivalent way to collapse — there's no "Show less" control for it at all.

What Should Happen?

The panel should go back to its normal size once the large content is gone, or at least offer the same "Show less" collapse control that long messages get.

Error Messages/Logs

N/A — no error messages, this is a UI layout issue.

Steps to Reproduce

1. Open the Claude Code chat panel in VS Code.
2. Paste a prompt that includes a fenced code block (triple backticks, ```) into the input.
3. Submit or keep editing — the panel grows to fit it.
4. Try shrinking it back down (drag the divider, delete the text, etc.) — it stays expanded, and there's no "Show less" button like there is elsewhere in the UI.

Claude Model

Not sure / Multiple models

Is this a regression?

I don't know

Claude Code Version

anthropic.claude-code v2.1.226 (VS Code extension)

Platform

Anthropic API

Operating System

Windows

Terminal/Shell

VS Code integrated terminal

Additional Information

• VS Code version: 1.132.0 (x64)
• Might share a root cause with #76658 (input box expands and won't shrink on mobile/Remote Claude Code) — same symptom, different surface.
• Have a screenshot of the stuck panel but redacting some content first before attaching.