[BUG]

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?

When opening the Claude Code panel in VS Code, the extension throws an ENOENT error trying to access a non-existent path C:\cluster. The error occurs in the setupPanel function when calling fs.realpathSync(). This happens repeatedly when attempting to open or interact with the Claude Code panel.

What Should Happen?

The Claude Code panel should open without errors. The extension should either validate paths before calling realpathSync, or gracefully handle cases where a configured path no longer exists.

Error Messages/Logs

Error: ENOENT: no such file or directory, lstat 'C:\cluster'
      at Object.realpathSync (node:fs:2790:29)
      at Object.<anonymous> (node:electron/js2c/node_init:2:5778)
      at j4$.setupPanel
  (c:\Users\samkr\.vscode\extensions\anthropic.claude-code-2.1.263-win32-x64\extension.js:979:35873)
      at j4$.createPanel
  (c:\Users\samkr\.vscode\extensions\anthropic.claude-code-2.1.263-win32-x64\extension.js:979:33591)
      at
  c:\Users\samkr\.vscode\extensions\anthropic.claude-code-2.1.263-win32-x64\extension.js:1039:6763

Steps to Reproduce

1. Open VS Code
2. Connect to a remote SSH host
3. Open the Claude Code panel (via command palette or sidebar)
4. Error appears and panel fails to initialize

Claude Model

Opus

Is this a regression?

I don't know

Last Working Version

_No response_

Claude Code Version

2.1.263-win32-x64

Platform

Anthropic API

Operating System

Windows

Terminal/Shell

VS Code integrated terminal

Additional Information

_No response_