[BUG] Cowork: false cloud-only restriction in Projects + trusted folders don't persist across sessions

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?

Summary

Two related bugs make Cowork unusable for ongoing, local-folder projects on Claude Desktop (Windows):

1. Cowork falsely reports a "restricted to cloud" limitation when a session is started from within a Project, even though local execution is configured ("Only on this computer" is ON).
2. Globally-configured Trusted Cowork folders do not persist into new Cowork sessions — folders must be re-loaded fresh each session.

Together these defeat Cowork for any project with repetitive local file access.

Environment

• OS: Windows
• App: Claude Desktop (latest)
• Cowork setting: "Only on this computer" = ON
• Trusted Cowork folders: configured globally in Settings → Cowork → Manage
• Target drive: local D:\ (multiple trusted folders added)

Bug 1: False cloud-only restriction inside a Project

Steps to reproduce

1. Configure Cowork for local execution ("Only on this computer" ON).
2. Open an existing Project.
3. Start a Cowork session from within that Project.
4. Attempt a task requiring local file access (e.g., read a file on D:\).

Expected

Session runs locally and can reach trusted local folders, since local execution is configured.

Actual

Cowork reports that the work must run in the cloud / that the Project is restricted to cloud, and cannot access local D:\ paths — despite "Only on this computer" being ON. The reported restriction does not match the actual configured setting.

Bug 2: Trusted Cowork folders do not persist across sessions

Steps to reproduce

1. Add local folders under Settings → Cowork → Trusted Cowork folders → Manage.
2. Confirm they are listed as trusted.
3. Start a new Cowork session.
4. Attempt to access one of the trusted folders.

Expected

Trusted folders configured globally apply automatically to every new Cowork session without re-granting.

Actual

Folders must be loaded/re-granted fresh in each new Cowork session. Global trusted-folder configuration does not carry into new sessions.

Impact

For an ongoing project with daily, repetitive local file access, having to re-load trusted folders every session — on top of the false cloud-only restriction inside Projects — makes Cowork impractical. The intended "persistent, self-contained workspace" behavior of Projects + trusted folders is not delivered.

Notes

• Documentation states cloud sessions can reach local files while the desktop app is open and the session was started on desktop, and that local-folder Projects support Cowork on desktop. Observed behavior contradicts both.
• Related previously-filed MCP infrastructure issue: #89590.

What Should Happen?

What should happen

With "Only on this computer" ON and folders added under Trusted Cowork folders:

1. A Cowork session started from within a Project should run locally and reach the configured local folders on D:\ — the same as a session started from the desktop home. The Project should supply knowledge/context only; it should not force cloud execution or report a cloud-only restriction that contradicts the actual local-execution setting.

1. Trusted Cowork folders configured globally should apply automatically to every new Cowork session, with no per-session re-granting or re-loading. Adding a folder once should be enough for all subsequent sessions on that machine.

Net result: a Project plus globally-trusted folders should behave as a persistent, self-contained local workspace — open the Project, start Cowork, and repetitive local file access works every session without setup friction.

Error Messages/Logs

Steps to Reproduce

Steps to reproduce

Bug 1: False cloud-only restriction inside a Project

1. In Settings → Cowork, confirm "Only on this computer" is ON.
2. Add local folders under Trusted Cowork folders → Manage.
3. Open an existing Project.
4. Start a Cowork session from within that Project.
5. Ask Cowork to perform a task requiring local file access (e.g., read or list a file on D:\).
6. Observe: Cowork reports the work must run in the cloud / the Project is restricted to cloud, and cannot reach the local D:\ path — despite "Only on this computer" being ON.

Bug 2: Trusted folders don't persist across sessions

1. Add local folders under Settings → Cowork → Trusted Cowork folders → Manage.
2. Confirm they are listed as trusted.
3. Start a new Cowork session.
4. Ask Cowork to access one of those trusted folders.
5. Observe: the folder must be loaded/re-granted fresh in this session; the global trusted-folder configuration did not carry over.
6. Start another new session and repeat — the re-granting is required each time.

Claude Model

Opus

Is this a regression?

No, this never worked

Last Working Version

_No response_

Claude Code Version

unknown no about screen in app

Platform

Anthropic API

Operating System

Windows

Terminal/Shell

PowerShell

Additional Information

_No response_