[BUG] Rejected turn leaves entire session stuck in refusal loop, even for trivial prompts like "hola"

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?

Once a single turn in a Claude Code session gets rejected ("Sorry, the model declined to complete this request. Please rephrase your prompt."), every subsequent message in that SAME session gets rejected too — including completely trivial, harmless prompts like "hola" with zero context. The session appears to get stuck in a refusal state rather than re-evaluating each new message independently.

What Should Happen?

Each message should be evaluated on its own merits. A rejection on one turn should not cascade and auto-reject unrelated, harmless follow-up messages in the same session.

Error Messages/Logs

Sorry, the model declined to complete this request. Please rephrase your prompt.

Steps to Reproduce

1. In an existing Claude Code session (VS Code extension, Agent mode), send a prompt that triggers a rejection
2. Send a follow-up message in the SAME session (e.g. "lo ves") → also rejected
3. Send an even simpler follow-up in the SAME session (e.g. "hola", no other context) → still rejected
4. Open a BRAND NEW chat session (the "+" button) and send the exact same "hola" → works normally

Claude Model

Other

Is this a regression?

I don't know

Last Working Version

_No response_

Claude Code Version

ALL

Platform

Other

Operating System

Other

Terminal/Shell

VS Code integrated terminal

Additional Information

_No response_