fix(patch): cherry-pick 9a74271 to release/v0.33.0-preview.8-pr-21236 [CONFLICTS] (#21788)

Co-authored-by: Gaurav <39389231+gsquared94@users.noreply.github.com>
Co-authored-by: galz10 <galzahavi@google.com>

packages/cli/src/ui/hooks/useQuotaAndFallback.ts

@@ -67,14 +67,6 @@ export function useQuotaAndFallback({
   const isDialogPending = useRef(false);
   const isValidationPending = useRef(false);
 
-  // Initial overage strategy from settings; runtime value read from config at call time.
-  const initialOverageStrategy =
-    (settings.merged.billing?.overageStrategy as
-      | 'ask'
-      | 'always'
-      | 'never'
-      | undefined) ?? 'ask';
-
   // Set up Flash fallback handler
   useEffect(() => {
     const fallbackHandler: FallbackModelHandler = async (
@@ -109,9 +101,7 @@ export function useQuotaAndFallback({
             ? getResetTimeMessage(error.retryDelayMs)
             : undefined;
 
-          const overageStrategy =
-            config.getBillingSettings().overageStrategy ??
-            initialOverageStrategy;
+          const overageStrategy = config.getBillingSettings().overageStrategy;
 
           const creditsResult = await handleCreditsFlow({
             config,
@@ -209,7 +199,6 @@ export function useQuotaAndFallback({
     userTier,
     paidTier,
     settings,
-    initialOverageStrategy,
     setModelSwitchedFromQuotaError,
     onShowAuthSelection,
     errorVerbosity,