[BUG] Won't let me sign in on VScode

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 have tried running "Developer: Reload Window", uninstalling the Claude Code for VS Code extension and then installing it again but every time I try to sign in I get "Failed to retrieve auth status after login" after getting the "Build something great You’re all set up for Claude Code. You can now close this window."

What Should Happen?

I can sign in and use Claude within VS code

Error Messages/Logs

Failed to retrieve auth status after login

Steps to Reproduce

No scripts I am just trying to sign in. It all goes as it should but then it sends me back to the welcome page

Claude Model

Sonnet (default)

Is this a regression?

Yes, this worked in a previous version

Last Working Version

2.1.241

Claude Code Version

2.1.241

Platform

Anthropic API

Operating System

macOS

Terminal/Shell

VS Code integrated terminal

Additional Information

_No response_