claude-code - 💡(How to fix) Fix [BUG] Repeated API errors, stream idle timeouts, and excessive retry loops causing wasted credits and failed sessions

                                                                                                                                                                                                                                                During a single working session, Claude Code repeatedly encountered stream idle timeout / API errors mid-response, forcing session restarts. Each restart consumed credits without completing the task. The agent also exhibited a pattern of excessive multi-step research before answering straightforward questions, further burning credits and time before ultimately    
failing.                                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                           
Actual behaviour:                                                                                                                                                                                                                                                                                                                                                             
                                                                                                                                                                                                                                                                                                                                                                              
- Stream idle timeout / API errors occurring mid-session, multiple times                                                                                                                                                                                                                                                                                                      
- Agent retried silently, consuming credits, then failed anyway                                                                                                                                                                                                                                                                                                               
- User forced to restart session and re-establish context repeatedly                                                                                                                                                                                                                                                                                                          
- Substantive work lost on each failure                                                                                                                                                                                                                                                                                                                                       
                                                                                                                                                                                                                                                                                                                                                                              
Impact:                                                                                                                                                                                                                                                                                                                                                                       
                                                                                                                                                                                                                                                                                                                                                                              
- Wasted subscription credits (multiple failed sessions)                                                                                                                                                                                                                                                                                                                      
- Lost time re-establishing context across restarts                                                                                                                                                                                                                                                                                                                           
- No visibility into retry behaviour or credit consumption during failures, even with -debug
- excessive development time                                                                                                                                                                                                                                                                                               
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
Platform: Linux (Manjaro), Claude Code CLI                                                                                                                                                                                                                                                                                                                                    
Model: claude-sonnet-4-6                                                                                                                                                                                                                                                                                                                                                      
Date: 2026-05-09

Expected behaviour:                                                                                                                                                                                                                                                                                                                                                           
                                                                                                                                                                                                                                                                                                                                                                              
- Stable API connection through a complete response cycle                                                                                                                                                                                                                                                                                                                     
- No silent retry loops burning credits before surfacing an error to the user                                                                                                                                                                                                                                                                                                 
- Graceful failure with clear error message on first timeout, not repeated invisible retries

Steps to reproduce:                                                                                                                                                                                                                                                                                                                                                           
                                                                                                                                                                                                                                                                                                                                                                              
1. Open a Claude Code session on a moderately complex codebase (SQLMesh project, PostgreSQL)                                                                                                                                                                                                                                                                                  
2. Ask a question requiring 2–3 file reads and a direct recommendation                                                                                                                                                                                                                                                                                                        
3. Observe: agent reads multiple files, spawns tool calls, then hits API/stream error before responding                                                                                                                                                                                                                                                                       
4. Restart session, repeat — same failure pattern recurs