[BUG] IDE connection only works in VSCode's open folder directory, fails in subdirectories (v2.0.74)

[elfenlieds7]

Description

After upgrading to v2.0.74, Claude Code IDE connection only works when running claude in the exact directory that VSCode opened. Running claude in any subdirectory shows the extension is installed but fails to connect.

Environment

• Claude Code version: 2.0.74
• OS: Windows 11
• IDE: VSCode / Cursor
• Terminal: Integrated terminal

Steps to Reproduce

1. Open VSCode/Cursor at ~/projects (parent folder)
2. Run claude in ~/projects → IDE connects successfully
3. cd into a subdirectory ~/projects/some-project
4. Run claude → IDE extension shows installed but cannot connect

Expected Behavior

IDE connection should work in subdirectories of the opened workspace folder.

Actual Behavior

IDE connection only works in the exact directory VSCode opened. Subdirectories fail to connect.

Lock File Analysis

The lock file at ~/.claude/ide/*.lock shows:

{"workspaceFolders":["c:\Users\...\projects"]}

Only the root folder is registered. When running claude in a subdirectory, path matching fails.

Workaround

Downgrade to v2.0.72 where this worked correctly.

Possibly Related

This may be a regression. Previously subdirectory matching worked.