[BUG] "Use custom API key: true" ignored — Claude Code still authenticates via Google Vertex AI (Windows 11)

[powyncify]

Preflight Checklist

• I have searched existing issues and this hasn't been reported yet
• This is a single bug report (please file separate reports for different bugs)
• I am using the latest version of Claude Code

What's Wrong?

Environment:

• Claude Code version: 2.1.45
• OS: Windows 11
• API provider shown in Status: Google Vertex AI

Bug Description:
When using Claude Code under an organization‑managed account configured for Google Vertex AI, toggling “Use custom API key” to true in Settings → Config does not switch the API provider to Anthropic API.

Even when:

• ANTHROPIC_API_KEY is set as a Windows User environment variable

• “Use custom API key” is explicitly set to true

Claude Code continues to authenticate exclusively via Google Vertex AI, as shown in Settings → Status.

Expected behavior:
Setting "Use custom API key: true" should override the Vertex AI
provider and use ANTHROPIC_API_KEY for authentication.

Actual behavior:
Provider remains Google Vertex AI regardless of the Config setting.

Workaround:
Temporarily removing ANTHROPIC_VERTEX_PROJECT_ID from the session
environment (Remove-Item Env:ANTHROPIC_VERTEX_PROJECT_ID in
PowerShell) forces Claude Code to use ANTHROPIC_API_KEY correctly.

Root cause hypothesis:
ANTHROPIC_VERTEX_PROJECT_ID environment variable takes priority
over the "Use custom API key" Config setting. The Config toggle
appears to have no effect when Vertex env vars are present.

Suggested fix:
When "Use custom API key" is explicitly set to true, it should
take precedence over all provider environment variables, including
ANTHROPIC_VERTEX_PROJECT_ID.

What Should Happen?

Expected behavior:

One of the following should occur:

1. If org policy prevents switching providers:

• The UI should disable or annotate “Use custom API key”
• Or display a clear message indicating the provider is locked by org policy

OR

2. If switching is allowed:

• “Use custom API key: true” should override Vertex AI and use ANTHROPIC_API_KEY

Actual Behavior

• Provider remains Google Vertex AI
• “Use custom API key” toggle has no visible or functional effect
• No warning or explanation is shown to the user

Additional Findings

• Account has "penguinModeOrgEnabled": true
• Vertex AI provider selection appears to be enforced server‑side
• Local config files and environment variables cannot override this
• When Google Application Default Credentials expire, Claude Code fails with:
  API Error: Could not load the default credentials
  *Re‑authenticating with:
  gcloud auth application-default login
  resolves the error

** Suggestion Improvements**

• Disable or annotate “Use custom API key” when provider is locked by org policy
• Improve error messaging when Vertex AI credentials expire
• Clarify provider precedence rules in documentation and UI

Error Messages/Logs

Steps to Reproduce

Setting "Use custom API key" to true in Config does not switch
the API provider from Google Vertex AI to Anthropic API.

Even with:

• ANTHROPIC_API_KEY set as a Windows User environment variable
• "Use custom API key" toggled to true in Settings → Config

Claude Code continues to authenticate against Google Vertex AI
(confirmed in Settings → Status: "API provider: Google Vertex AI").

Claude Model

None

Is this a regression?

Yes, this worked in a previous version

Last Working Version

No response

Claude Code Version

2.1.45

Platform

Google Vertex AI

Operating System

Windows

Terminal/Shell

PowerShell

Additional Information

No response

[github-actions]

Found 3 possible duplicate issues:

1. [DOCS] Confusing variable override logic in Google Vertex AI credentials documentation #19169
2. [BUG] Vertex AI Environment Variables Ignored #2804
3. [BUG] Can't log out of Claude Code API Key usage or use Vertex AI #1372

This issue will be automatically closed as a duplicate in 3 days.

• If your issue is a duplicate, please close it and 👍 the existing issue instead
• To prevent auto-closure, add a comment or 👎 this comment

🤖 Generated with Claude Code

[powyncify]

This issue is not a duplicate: unlike prior env‑var or docs bugs, this concerns org‑enforced provider selection where the “Use custom API key” UI toggle remains enabled but cannot function, with no warning or explanation to the user.

[powyncify]

Note to maintainers — pre-empting duplicate closure

This issue may superficially resemble prior Vertex AI auth reports, but it is distinct from each of them. Brief comparison:

• [BUG] Vertex AI Environment Variables Ignored #2804 — env vars checked by presence instead of value (CLAUDE_CODE_USE_VERTEX=0 ignored). Our issue: env vars are correctly unset; Vertex AI persists due to org policy.
• [DOCS] Confusing variable override logic in Google Vertex AI credentials documentation #19169 — documentation ambiguity about GCLOUD_PROJECT vs ANTHROPIC_VERTEX_PROJECT_ID precedence. Our issue: a UI control ("Use custom API key"), not documentation.
• [BUG] Can't log out of Claude Code API Key usage or use Vertex AI #1372 — /status displayed wrong provider while backend was correct. Our issue: the opposite — backend ignores the user's explicit config choice with no explanation.

What makes this distinct:
This issue specifically concerns organization-managed accounts (penguinModeOrgEnabled: true) where Vertex AI is enforced server-side. In this context:

1. The "Use custom API key" toggle in Settings → Config remains visible and interactive, implying it works
2. It silently has no effect
3. No warning, annotation, or explanation is shown to the user
4. Extensive local troubleshooting (env vars, config files, process restarts) is required before the user can discover the provider is org-locked

The actionable request is narrow and well-defined:

• If provider is org-locked: disable or annotate the "Use custom API key" toggle, or show a clear message
• If switching is permitted: the toggle should actually work

Happy to provide additional debug output or .claude.json excerpts if helpful. Thank you for reviewing.

[powyncify]

Update — server-side enforcement confirmed

After exhaustive local troubleshooting (removing all Vertex env vars, disabling GCP credentials, clearing all config files and caches, full logout and fresh login with explicit API key approval), Claude Code still shows API provider: Google Vertex AI.

This confirms the provider mandate is enforced server-side for org-managed accounts (penguinModeOrgEnabled: true). The "Use custom API key" toggle in Settings → Config is therefore permanently non-functional for this class of users — not just broken, but architecturally incapable of working as the UI implies.

Minimum viable fix: Detect penguinModeOrgEnabled: true at startup and either disable the "Use custom API key" toggle entirely, or display an explicit message such as:
"API provider is managed by your organization and cannot be changed here."

This would have saved several hours of debugging.

[github-actions]

Closing for now — inactive for too long. Please open a new issue if this is still relevant.

[github-actions]

This issue has been automatically locked since it was closed and has not had any activity for 7 days. If you're experiencing a similar issue, please file a new issue and reference this one if it's relevant.