When creating a new project under Windows you will get a "Failed to initialize Claude: Command failed with exit code 1 (exit code: 1) Error output: Check stderr output for details" error message. In the command line you get a "The command line is too long." message, which is accurate. Windows cannot accept the long prompt being passed to Claude on the command line (the DOS command line limit is like 8k characters).
A suggested possible long term fix is to modify server/services/spec_chat_session.py to pass the prompt to Claude via the file parameter so it can be of any length.