Claude Code v2.1.128: Enhanced MCP Tools, Plugin Improvements, and Quality of Life Updates

The latest Claude Code release v2.1.128 delivers a comprehensive set of improvements focused on enhancing the developer experience with better MCP server management, streamlined plugin handling, and numerous quality-of-life fixes.

What’s New

Enhanced MCP Server Management

Improved MCP visibility: The /mcp command now displays tool counts for connected servers and clearly flags servers that connected with zero tools
Reserved workspace name: workspace is now a reserved server name to prevent conflicts
Reduced connection noise: MCP server reconnections no longer flood conversations with complete tool lists—re-announced tools are now summarized by server prefix
Better tool result handling: Fixed an issue where MCP tool results would drop images when servers returned both structured content and content blocks

Plugin System Improvements

ZIP archive support: The --plugin-dir flag now accepts .zip plugin archives in addition to directories, making plugin distribution easier
Fixed marketplace errors: Resolved “Marketplace ‘inline’ not found” errors for plugins loaded via --plugin-dir

User Experience Enhancements

Random session colors: Running /color without arguments now picks a random session color
Cleaner model picker: The /model picker now collapses duplicate Opus 4.7 entries and shows the current Opus as simply “Opus”
Console channels support: The --channels feature now works with console (API key) authentication
Persistent settings: SDK hosts now receive persistent localSettings suggestions for Bash permission prompts

Developer Workflow Fixes

Git workflow improvement: EnterWorktree now correctly creates branches from local HEAD instead of origin/<default-branch>, preventing loss of unpushed commits
Better error guidance: Auto mode now provides helpful hints (retry, /compact, or --debug) when the classifier can’t evaluate an action
Parallel shell commands: Fixed an issue where failing read-only commands would cancel sibling parallel calls

Technical Improvements

Clean subprocess environment: Subprocesses no longer inherit OTEL_* environment variables, preventing OTEL conflicts
Large input handling: Fixed crash loops when piping very large input (>10MB) to claude -p via stdin
Session management: Resolved false “Prompt is too long” blocks for sessions on 1M-context models

UI and Terminal Fixes

Focus mode: Fixed brief dimming of previous responses when submitting new prompts
Terminal notifications: Eliminated stray desktop notifications on /exit in Kitty and similar terminals
Link handling: Long URLs are now individually clickable on every wrapped row in fullscreen mode
Markdown rendering: Fixed link labels being lost on terminals without OSC 8 hyperlink support
Code block copying: Resolved leading whitespace issues when copying fenced code blocks from list items

How to Update

To update to Claude Code v2.1.128, follow your standard update process for Claude Code installations. The update includes all the improvements and fixes listed above with no breaking changes to existing workflows.