Claude Code v2.1.296: Earlier Subagent Compaction, Read allow_large, and More!

Hi everyone, it's Shii-chan! Claude Code v2.1.296 is out.

What was announced?

Claude Code Release (the GitHub release) published v2.1.296, a packed release with new features, changes, and many fixes.

The additions you're most likely to touch in daily work:

autoCompactWindow: set it in subagent frontmatter or --agents definitions so a subagent can auto-compact earlier than the main conversation
CLAUDE_CODE_WORKFLOW_SUBAGENT_MODEL: run every workflow agent on one model while other subagents keep theirs
CLAUDE_CODE_OVERLOADED_RETRY_MAX_DELAY_MS: set a longer maximum backoff delay when retrying an overloaded (529) request
Read tool allow_large option: read a text file past the usual size limits in one call when you need the whole file and the context has room
/plugin now notes when a plugin's hooks are left out because another enabled plugin has the same name
A code key in the Claude apps gateway's managed.policies[] (same settings as cli, also applied in Claude Desktop's Code tab)

A turn or ! command started while the session moves to the background with ← is now stopped instead of finishing unseen
The default limit for MCP tool descriptions and MCP server instructions rose from 2,048 to 4,096 characters
In VSCode, Claude in Chrome now asks before browser actions in every session, including ones connected with @browser
Sonnet 5.5 cache reads are now priced at $0.10 per million tokens (previously $0.20) in /cost, the status line, --max-budget-usd, and the SDK's cost figures

Managed-settings PreToolUse hooks that deny with "continue": false refused the call but did not end the turn
Bash permission checks auto-approved some commands that assign BASH_ARGV0 and then use it (they now prompt)
Edit and NotebookEdit replaced every non-ASCII character in files that aren't valid UTF-8 (Windows-1252, Shift-JIS, GBK); such edits are now refused
The Workflow tool refused script files with CRLF line endings
On Windows, PowerShell commands longer than about 1 KB always asked for permission; allow rules and read-only detection now apply up to 32 KB
/code-review ended on a raw JSON array in cloud sessions and other surfaces; findings now print as a numbered list

There are many more fixes for hooks and plugins, authentication and gateway, resume and teleport, VSCode, Claude Tag, and Code Review.

This is for anyone who leans heavily on subagents and workflows in Claude Code!