Set to 1 to make /init run an interactive setup flow. The flow asks which files to generate, including CLAUDE.md, skills, and hooks, before exploring the codebase and writing them. Without this variable, /init generates a CLAUDE.md automatically without prompting.
Probably. It does seem to have a built-in tool for exploring its own docs, and it has a special mode for working in a .claude/ directory. It's probably intended that users do this.