MCP servers not available anymore since latest update

[Lyve1981]

Describe the bug

MCP servers are not working anymore in the latest version. /mcp show lists them and they are enabled, however, the LLM does not know them anymore:

Unfortunately, I still don't see any MCP tools in my available toolset after the restart. My tools are: powershell,
view/edit/create, grep/glob, web_fetch, task agents, sql, and the standard CLI tools — but no YouTrack MCP tools.

This does seem like a bug where the MCP server tools aren't being injected into the agent context despite being
configured. You might want to report it via /feedback.

LLM is Claude Opus 4.6 high

Affected version

GitHub Copilot CLI 1.0.9

Steps to reproduce the behavior

I start copilot as:
copilot --disable-mcp-server JIRA --disable-mcp-server mongodb-preprod
Note that I disable some MCPs, but not all of them

Expected behavior

MCP should be found and used by the LLM

Additional context

Windows 11, cmd

The MCP I want to use:

    "YouTrack": {
      "tools": [
        "*"
      ],
      "type": "local",
      "command": "npx",
      "args": [
        "mcp-remote",
        "https://xxxxxx.youtrack.cloud/mcp",
        "--header",
        "Authorization: Bearer perm-xxxxxxxxxxxxxxx"
      ],
      "source": "user"
    },

[pmabres]

I'm having the same issue with latest copilot cli. (macos)