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When a project fails to initialize because the directory no longer exists (e.g., test artifacts, deleted folders), automatically remove it from the project list instead of showing the error repeatedly on every reload. This prevents users from being stuck with broken project references in their settings after testing or when project directories are moved/deleted. The user is notified with a toast message explaining the removal. Co-Authored-By: Claude Haiku 4.5 <noreply@anthropic.com>