[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?

With Claude Code CLI running in an external terminal (iTerm) connected to VS Code via /ide, and permission mode set to Manual, file edits never open a diff tab in VS Code. Instead, the diff and Yes/No approval prompt render entirely inline in the terminal. This happens even after a complete clean reinstall of both the CLI (native installer) and the VS Code extension, with a confirmed single CLI binary, a fresh and valid IDE lock file, and a confirmed live WebSocket connection to the extension's ide MCP server. Checking VS Code directly while the terminal's approval prompt was still pending confirmed no diff tab ever appears there.

What Should Happen?

Per Anthropic's own docs (code.claude.com/docs/en/ide-integrations, "The built-in IDE MCP server" section), when the CLI is connected to an IDE, file edits in Manual mode should open in the IDE's native diff viewer instead of the terminal, using the local ide MCP server the extension runs. The approval flow should happen in VS Code's diff UI, not purely in-terminal text.

Error Messages/Logs

Error Messages/Logs:
On connect (VS Code Output panel → Claude Code channel):

[info] New WS connection from: /
[info] MCP server connected to transport
[info] [DiagnosticStreamManager] Started streaming diagnostics
[info] Registered diagnostic client: client_3

On every edit attempt, regardless of permission mode:

[info] Closing all diff tabs in the editor...
[info] Closed 0 diff tabs.
[info] [DiagnosticStreamManager] Notifying 1 clients about diagnostics change for 1 files

No log line ever indicates an attempt to open a new diff tab, and no error appears — the sequence just stops after the diagnostics notification. Lock file at ~/.claude/ide/<port>.lock confirmed fresh and correct each time:

json
{"pid":70346,"workspaceFolders":["/Users/adamdemirel/Code/cohort-004-project"],"ideName":"Visual Studio Code","transport":"ws","runningInWindows":false,"authToken":"a38ded7d-7d80-4593-b69c-f66a7ae8e633"}

Steps to Reproduce

1. Fully removed all prior CLI installs (npm-global leftover + native) and the VS Code extension, including ~/.claude, ~/.local/bin/claude, ~/.local/share/claude, and the extension's globalStorage directory
2. Fresh native install: curl -fsSL https://claude.ai/install.sh | bash
3. In iTerm: claude, then /ide — extension auto-installs, reports "Installed extension to VS Code"
4. Confirmed lock file at ~/.claude/ide/<port>.lock is fresh with correct workspaceFolders, matching PID alive
5. Set permission mode to Manual
6. Asked Claude to edit package.json

Claude Model

Sonnet (default)

Is this a regression?

Yes, this worked in a previous version

Last Working Version

_No response_

Claude Code Version

2.1.278

Platform

Anthropic API

Operating System

macOS

Terminal/Shell

iTerm2

Additional Information

_No response_