docs: Add bug report for VSCode extension installation regression

Documents the "1: 1" error that occurs when using /ide command
in Homespace environments. The error appears to be caused by
incorrect parsing of subprocess execution results where the
error field receives the exit code instead of the actual error
message from stderr.

Includes:
- Root cause analysis of the error pattern
- Timeline of when the regression was introduced
- Temporary workaround for affected users
- Required fix description

Slack: https://anthropic.slack.com/archives/C07VBSHV7EV/p1765922691961929

docs/bugs/vscode-extension-regression-1-1-error.md

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+# VSCode Extension Installation Regression: "1: 1" Error
+
+**Reported**: 2025-12-16
+**Status**: Under Investigation
+**Slack Thread**: https://anthropic.slack.com/archives/C07VBSHV7EV/p1765922691961929?thread_ts=1765922103.768169&cid=C07VBSHV7EV
+
+## Description
+
+Users are unable to use the VSCode IDE integration when running Claude Code in a Homespace (containerized environment). The `/ide` command initially reports success, but a few seconds later an error appears.
+
+### Error Message
+
+```
+IDE: ✘ Error installing VS Code extension: 1: 1
+      Please restart your IDE and try again.
+```
+
+## Steps to Reproduce
+
+1. Run Claude Code in a Homespace environment
+2. Execute `/ide` command
+3. Observe initial success message
+4. Wait a few seconds - error popup appears
+5. Run `/status` to confirm the error
+
+## Root Cause Analysis
+
+### Error Pattern Analysis
+
+The error message `1: 1` follows the pattern from the extension installation error handling:
+
+```javascript
+throw Error(`${result.code}: ${result.error} ${result.stderr}`)
+```
+
+For "1: 1" to appear, the values must be:
+- `result.code` = 1 (exit code from VS Code CLI)
+- `result.error` = "1" (incorrectly set to the exit code instead of error message)
+- `result.stderr` = "" (empty)
+
+### Regression Hypothesis
+
+The async execution result object is incorrectly populating the `error` field with the numeric exit code instead of the actual error message from stderr. This appears to be a regression in subprocess output parsing.
+
+### Timeline
+
+- **Working**: Last week (user confirmed)
+- **Broken**: Current version (2.0.59+)
+- **Likely introduced**: Between versions 2.0.59-2.0.70
+
+## Environment
+
+- Running in Homespace (containerized environment)
+- VSCode Remote development setup
+
+## Temporary Workaround
+
+If experiencing this issue, try:
+
+1. Manually install the Claude Code extension in VS Code:
+   - Open VS Code Command Palette (Ctrl+Shift+P / Cmd+Shift+P)
+   - Type "Extensions: Install Extension"
+   - Search for "Claude Code" (by Anthropic)
+   - Install manually
+
+2. After manual installation, restart your IDE and try `/ide` again
+
+## Related Changes in CHANGELOG
+
+Potentially relevant recent changes:
+- 2.0.64: VSCode: Fixed extension not working on Windows ARM64
+- 2.0.62: Fixed IDE diff tab not closing when rejecting file changes
+- 2.0.61: Reverted VSCode support for multiple terminal clients
+- 2.0.60: VSCode: Added support for multiple terminal clients
+- 2.0.59: VS Code: Fixed .claude.json config file being read from incorrect location
+
+## Fix Required
+
+The fix needs to address how subprocess execution results are parsed, specifically ensuring that:
+1. The `error` field contains the actual error message (from stderr), not the exit code
+2. Proper error handling for when VS Code CLI fails in containerized environments