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May 3, 2026 · Artificial Intelligence

How Claude Code Handles max_output_tokens and Model Downgrade to Keep Agents Running

The article explains Claude Code's multi‑level fault‑tolerance for max_output_tokens errors, detailing dynamic token allocation, automatic model downgrade, environment‑variable controls, StopFailure hooks, and their coordination with compaction to prevent agents from getting stuck during long‑running tasks.