diff --git a/webview-ui/src/context/ExtensionStateContext.tsx b/webview-ui/src/context/ExtensionStateContext.tsx
index c7daf643e3..ac9243d572 100644
--- a/webview-ui/src/context/ExtensionStateContext.tsx
+++ b/webview-ui/src/context/ExtensionStateContext.tsx
@@ -142,23 +142,29 @@ export const ExtensionStateContextProvider: React.FC<{ children: React.ReactNode
 	}, [])
 
 	const handleInputChange = useCallback(
+		// Returns a function that handles an input change event for a specific API configuration field.
+		// The optional "softUpdate" flag determines whether to immediately update local state or send an external update.
 		(field: keyof ApiConfiguration, softUpdate?: boolean) => (event: any) => {
-			if (softUpdate === true) {
-				setState((currentState) => {
+			// Use the functional form of setState to ensure the latest state is used in the update logic.
+			setState((currentState) => {
+				if (softUpdate) {
+					// Return a new state object with the updated apiConfiguration.
+					// This will trigger a re-render with the new configuration value.
 					return {
 						...currentState,
 						apiConfiguration: { ...currentState.apiConfiguration, [field]: event.target.value },
 					}
-				})
-				return
-			}
-			setState((currentState) => {
-				vscode.postMessage({
-					type: "upsertApiConfiguration",
-					text: currentState.currentApiConfigName,
-					apiConfiguration: { ...currentState.apiConfiguration, [field]: event.target.value },
-				})
-				return currentState // No state update needed
+				} else {
+					// For non-soft updates, send a message to the VS Code extension with the updated config.
+					// This side effect communicates the change without updating local React state.
+					vscode.postMessage({
+						type: "upsertApiConfiguration",
+						text: currentState.currentApiConfigName,
+						apiConfiguration: { ...currentState.apiConfiguration, [field]: event.target.value },
+					})
+					// Return the unchanged state as no local state update is intended in this branch.
+					return currentState
+				}
 			})
 		},
 		[],