[BUG] VS Code Extension: Thinking toggle button is inverted and has no visual feedback (v2.1.112)

[betovildoza]

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?

Description

After the recent update to Claude Code VS Code extension v2.1.112, the Thinking toggle button has a broken and counterintuitive behavior:

• When clicking the toggle, it moves to the left (inverted position).
• There is no visual feedback at all: no color change, no highlight, no checkmark, no animation, and no clear indication of the real on/off state.
• Because of this, it's very easy to have the toggle in the wrong state without realizing it.
• The thinking paragraph/block does not display properly unless the toggle is manually inverted.
• The setting "showThinkingSummaries": true in .claude/settings.json does not fix this UI issue.

Additionally, the expanded/collapsed state of the thinking block does not persist between sessions (it always collapses again after restarting VS Code or the panel).

Steps to Reproduce

1. Open the Claude Code panel in VS Code.
2. Click the Thinking toggle button.
3. Observe that it slides to the left but gives no visual indication of its actual state.
4. The thinking content remains hidden or not rendered correctly.

Environment

• OS: Windows 10
• VS Code version: 1.116.0
• Claude Code extension: 2.1.112
• Reproducible immediately after the update and after full restart.

Related Issues

• [Bug] Thinking summaries not displayed when showThinkingSummaries enabled in settings.json #48065 → Thinking summaries not displayed even when showThinkingSummaries: true
• Add persistent setting to always show thinking trace #41548 → Persistent setting to always show/keep thinking trace expanded (the collapsed state does not persist between sessions)

This appears to be a regression introduced in the April 2026 UI updates for the thinking indicator in the VS Code extension.

What Should Happen?

Expected Behavior

The toggle should have clear visual feedback (e.g. different color, active state highlight, or icon change) and an intuitive position/direction. The expanded state of the thinking block should be remembered between sessions.

Thanks!

Error Messages/Logs

Steps to Reproduce

Steps to Reproduce

1. Open the Claude Code panel in VS Code.
2. Click the Thinking toggle button.
3. Observe that it slides to the left but gives no visual indication of its actual state.
4. The thinking content remains hidden or not rendered correctly.

Claude Model

None

Is this a regression?

I don't know

Last Working Version

No response

Claude Code Version

2.1.112

Platform

Anthropic API

Operating System

Windows

Terminal/Shell

Other

Additional Information

No response

[hifihedgehog]

Same bug on Windows / VS Code extension 2.1.x with Opus 4.7. Not macOS-specific.

Root cause is now public (credit to the workaround in #8477 (comment)): Opus 4.7 changed the API default for thinking blocks from display: "summarized" to display: "omitted". The blocks are still in the response stream, but the thinking field is empty unless the caller passes display: "summarized" explicitly. Documented in Anthropic's own migration guide: https://platform.claude.com/docs/en/about-claude/models/migration-guide#migrating-to-claude-opus-4-7

Net effect: showThinkingSummaries, alwaysThinkingEnabled, and viewMode: "verbose" have nothing to render, because Claude Code does not pass display: "summarized" when calling the Opus 4.7 API. showThinkingSummaries is the documented, official way to surface thinking in the VS Code extension, and it is silently broken on Opus 4.7. The settings surface never caught up to the API change.

Two undocumented workarounds (from the same comment):

1. Add to ~/.claude/settings.json:

   {
     "env": {
       "CLAUDE_CODE_EXTRA_BODY": "{\"thinking\":{\"type\":\"adaptive\",\"display\":\"summarized\"}}"
     }
   }

2. Hidden CLI flag: --thinking-display summarized

The env var approach works for the VS Code extension since it delegates to the CLI.

Why this is high-priority, not a cosmetic regression:

Visible real-time thinking was load-bearing for the steering loop. With it visible, you could stop the model going down a wrong branch before it spent N turns of token budget on a wrong premise; you could verify it had internalized constraints from CLAUDE.md / memory rather than hallucinated them; and you could audit assumptions before committing to a plan.

With it hidden behind an unexpandable pill, you cannot tell whether a wrong final answer came from a wrong premise or a wrong execution of a right premise. Silent assumption drift becomes invisible until after the wrong action is taken. "Thought for 376s" is a duration, not a signal. It tells you nothing actionable. This is a regression in the developer's ability to supervise the agent.

On the user side: this is a paid product. Pro at $20/month, Max at $100–$200/month. Paying customers should not have to monkey-patch cli.js, reverse-engineer an undocumented CLAUDE_CODE_EXTRA_BODY env var, or scrape issue threads to recover functionality that worked in the previous release of the same product. The workaround being undocumented is itself a bug. The gap between what the API supports and what Claude Code exposes as a first-class setting keeps widening with every model bump.

Related open issues, same root problem:

• #8477 — original tracking issue where the API-default change was traced and the workaround was published
• #49268 — harness doesn't set display: "summarized" for Opus 4.7 (same root cause, named explicitly)
• #49757 — empty/unexpandable stub in VS Code extension (Opus 4.7)
• #49902 — thinking summaries not rendered (VS Code extension 2.1.112)
• #49322 — thinking summaries not rendered in VS Code extension (Opus 4.7)
• #48065 — thinking summaries not displayed when showThinkingSummaries enabled
• #30958 — earlier transcript/TUI variant of the same regression (v2.1.69)
• #51131 — extended thinking dropdown no longer expandable in VS Code extension (Opus 4.7)
• #33163 — "Bring back thinking" feature request, same underlying ask

What would actually resolve this:

1. Pass display: "summarized" by default for Opus 4.7+ when showThinkingSummaries and alwaysThinkingEnabled are on. Or expose a first-class thinkingDisplay setting alongside the existing thinkingEnabled and effortLevel.
2. Restore the expandable thinking block in the VS Code extension chat panel so showThinkingSummaries actually shows summaries when the data is present.
3. Update the docs so they reflect current showThinkingSummaries semantics on Opus 4.7+ instead of describing behavior that no longer applies.