What
While it runs, Claude Code watches the folders holding your settings files so it can pick up edits without a restart. Before it starts watching a folder, it now checks that neither the folder nor any symlink inside it leads onto a network path. A symlink is a file that points to another location.
If the check fails, or cannot be completed, that folder is not watched for the rest of the session, and Claude Code writes a line to its debug log saying so. Before, every settings folder was watched.
Why
This keeps Claude Code from reaching into network mounts, such as the macOS /Network or /.vol paths, just because a settings symlink points there. The catch is that edits to settings in such a folder are not picked up until you restart the session.