[BUG] Fable 5 quality regression: ignores explicit instructions after acknowledging them, increasing hallucinations
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?
Environment
- Model: claude-fable-5 (Effort: High)
- Clients affected: BOTH the Claude Code VS Code extension (anthropic.claude-code, v2.1.235) AND the Claude desktop app (Code feature). Same degraded behavior reproduced in both, so this is model-side, not client-specific.
- Date observed: August 2026, worsening over recent weeks
Summary
Fable 5's instruction-following and factual reliability have degraded noticeably. The model acknowledges explicit instructions, claims to have committed them to memory/rules, and then violates them within the same session. Hallucination frequency has also increased.
Additional symptoms
- Hallucinated facts stated with confidence (e.g., wrong institutional counts/details in document review tasks), getting more frequent
- Instructions given early in a session are silently dropped as the session grows, even after explicit acknowledgment
- Over-interpretation of simple constraints into broader restrictions the user never asked for
Impact
This makes Fable 5 unreliable for multi-step document workflows. The acknowledge-then-violate loop is worse than a refusal, because it wastes turns and destroys trust in the model's confirmations.
(Screenshots attached below)
What Should Happen?
An acknowledged instruction should be followed for the remainder of the session. A simple constraint ("don't auto-open files") should not be expanded into unrelated restrictions the user never asked for.
Error Messages/Logs
Steps to Reproduce
- In a document-review session (VS Code extension or desktop app Code feature), explicitly instruct the model NOT to open files on my behalf when delivering outputs - just list the absolute paths.
- The model acknowledges, creates a rule file (
feedback-no-relative-chat-links.md), and confirms the rule was saved. - Continue the session. The model then over-corrects in the wrong direction (strips path usability entirely) while still not fixing the actual behavior complained about.
- Instead of changing behavior, it produces a performative artifact (a new .md rule file) - a pattern where the model "evaluates" instructions rather than executing them.
- Repeat corrections -> same acknowledge-then-violate loop.
Claude Model
Other
Is this a regression?
Yes, this worked in a previous version
Last Working Version
_No response_
Claude Code Version
2.1.235 (VS Code extension); also reproduced in Claude desktop app
Platform
Anthropic API
Operating System
macOS
Terminal/Shell
VS Code integrated terminal
Additional Information
_No response_