Tool output is fully expanded by default and the collapse toggle (▸) is non-functional

Environment

• Claude Code version: 2.1.76
• OS: Windows 11 Home (10.0.26200)
• Shell: PowerShell 7
• Terminal: Windows Terminal
• First observed: ~1 day ago (persists across new sessions and machine restart)

Description

Every tool-call result in the transcript renders fully expanded. The ▸ / ▾ toggle icon next to each tool block does not collapse or expand on click — it appears inert. The result is a very long, wall-of-text transcript where past tool output (file reads, command output, search results) can't be folded away to scan back through the conversation.

Steps to reproduce

1. Start a new Claude Code session in any project.
2. Have the assistant run any tool that produces non-trivial output — e.g. Read on a file >50 lines, Bash running git log, or a Grep with content output.
3. Observe that the tool result is rendered fully expanded.
4. Click the ▸ toggle to the left of the tool block.
5. Expected: the tool output collapses to a one-line summary.
6. Actual: nothing happens; output remains fully expanded.

Impact

• Transcript becomes hard to navigate after even a handful of tool calls.
• Scrolling back through prior turns is significantly slower.
• Context-window usage isn't affected (this is a UI-only issue), but the human-readability cost is real for long sessions.

What I've tried

• Restarting the Claude Code session (no effect).
• Restarting the terminal (no effect).
• The behavior is consistent across at least the last several sessions.

Notes

• I don't recall changing any settings or upgrading recently around when this started.
• If there's a config flag or keybinding that controls default-collapsed state, please point me at it — I checked /config but didn't find an obvious toggle.