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[DOCS] Clarify UX differences between Terminal CLI and VS Code Extension #13528

Description

@bgondell

Documentation Type

Missing documentation (feature not documented)

Documentation Location

No response

Section/Topic

interactive features

Current Documentation

No response

What's Wrong or Missing?

Summary
Users should be informed that the Claude Code experience differs between running in a native terminal vs. the VS Code integrated terminal/extension. Currently, this isn't documented, leading to confusion about whether observed differences are bugs or expected behavior.
The Issue
When running Claude Code in a native terminal (e.g., Windows Terminal, iTerm, etc.), certain interactive features work that don't appear in the VS Code integrated terminal:

Interactive checklists for confirming multi-step plans
Selection prompts for options
Other TTY-dependent interactive UI elements

This happens because VS Code's integrated terminal runs in a pseudo-TTY environment where some interactive prompt libraries don't render or behave the same way.
Impact
Users who primarily use Claude Code through VS Code may:

Never see certain interactive features
Miss opportunities for granular control over execution plans
Assume the simplified flow is the only experience available

Environment

OS: Windows 11
Terminals tested: Windows Terminal (full interactivity) vs VS Code integrated terminal (reduced interactivity)

Suggested Improvement

Add a section to the documentation (README or dedicated docs) that:

Lists known differences between terminal environments
Explains why these differences exist (TTY interactivity)
Helps users choose the right environment based on their needs

Impact

Low - Minor confusion or inconvenience

Additional Context

No response

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