[BUG] Plugin userConfig template ${user_config.X} not substituted in lspServers initializationOptions

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?

A plugin declares userConfig.<key> with a default value, referenced as "${user_config.<key>}" inside lspServers.<name>.initializationOptions.
The raw JSON-RPC initialize request sent to the LSP server contains the literal, unsubstituted string "${user_config.<key>}" — not the default value, and not a custom value either (none was set in settings.local.json, which only enables the plugin).

What Should Happen?

${user_config.<key>} should resolve to the custom value if set in settings.local.json, otherwise to the default declared in the plugin's userConfig schema.

Error Messages/Logs

Steps to Reproduce

1. Create a plugin manifest with:

"userConfig": {
"my_key": { "type": "string", "required": true, "default": "some/default/value" }
},
"lspServers": {
"myServer": {
...
"initializationOptions": { "someField": "${user_config.my_key}" }
}
}

1. Enable the plugin without setting a custom value for my_key in settings.local.json.
2. Inspect the LSP server's log, or the raw initialize request payload sent to it.

Observed: "someField": "${user_config.my_key}" (literal string)
Expected: "someField": "some/default/value"

Claude Model

Sonnet (default)

Is this a regression?

I don't know

Last Working Version

_No response_

Claude Code Version

2.1.278

Platform

Anthropic API

Operating System

Ubuntu/Debian Linux

Terminal/Shell

Other

Additional Information

_No response_