[BUG] VSCode UI/text overlap in sidebar

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?

Hi, I don't know if this is a feature or a bug. In the Claude Code VSCode extension there is an overlap of multiple text elements making reading quite difficult.

<img width="529" height="424" alt="Image" src="https://github.com/user-attachments/assets/157c527c-73c9-435c-98e7-cb534b79a69c" />

What Should Happen?

I expected the elements to have a non-transparent background.

Error Messages/Logs

Steps to Reproduce

Create conversation that is higher than the window size. Scroll up. Search for files.

Claude Model

None

Is this a regression?

No, this never worked

Last Working Version

_No response_

Claude Code Version

2.0.1 (Claude Code)

Platform

Anthropic API

Operating System

macOS

Terminal/Shell

VS Code integrated terminal

Additional Information

_No response_