VSCode extension: long prompts push Claude's response out of view / hard to read

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 I submit a very long prompt in the Claude Code chat panel inside VSCode, the input text takes up most of the visible panel height. Once Claude responds, the reply is pushed down and only a small sliver (or none) of it is visible without a lot of scrolling — making it hard to read the answer, especially right after sending.

What Should Happen?

After sending a prompt, the panel should scroll to (or prioritize showing) Claude's response, not leave the long prompt text dominating the visible area. Ideally the submitted prompt collapses to a compact/collapsible block (similar to how tool calls are collapsed) once sent, so the response is immediately readable.

Error Messages/Logs

Steps to Reproduce

Open the Claude Code extension panel in VSCode.
In the chat input, type or paste a very long prompt (e.g. 15-20+ lines of text — a detailed brainstorming request, multi-paragraph spec, etc.).
Submit the prompt.
Observe that the long prompt text remains displayed at full height above Claude's response.
Try to read Claude's reply — it's pushed far down / off-screen, requiring significant scrolling, and on shorter responses only a small portion is visible in the remaining panel space.
Expected: panel scrolls to show the response clearly, or the sent prompt collapses so the reply is immediately readable.
Actual: the full-length prompt stays expanded, crowding out the response.

Claude Model

Sonnet (default)

Is this a regression?

Yes, this worked in a previous version

Last Working Version

_No response_

Claude Code Version

2.1.263

Platform

Anthropic API

Operating System

Windows

Terminal/Shell

Windows Terminal

Additional Information

_No response_