What
Project settings and local settings are stored in files inside your project folder. When Claude Code cannot work out where that file should go and the session has no working directory (the folder it was started in), saving those settings now fails with the message "This session has no working directory." Before, the save reported success and nothing was written.
Why
Settings changes that used to be dropped without a word now say that they were not saved.
Something disagreesSomething we can check disagrees with this entry, or the writer said they could not settle it.
The writer flagged doubt
Which kinds of session run without a working directory, such as headless or remote ones, is not confirmed.