[Bugs] agency_mode per-request spawn times out with many MCP servers (~2.5s deadline too tight)

**Mood:** 😔
**Category:** Bugs

## Summary

When `agency_mode` is enabled (server-side feature flag), the Copilot App spawns a fresh `agency.exe` process **for every request** (list_models, list_global_agents, get_session_state, telemetry, etc.). Each spawn must initialize the Copilot SDK and establish connections to all configured MCP servers before a hard ~2.5-second deadline. With 14 MCP servers configured in `~/.copilot/mcp-config.json`, initialization consistently exceeds this deadline, causing every request to fail with "request cancelled". The app enters a retry loop and never recovers.

The **Copilot CLI** reads the same `mcp-config.json` and works perfectly — it initializes once as a long-lived process (takes ~10-15s on first launch) and stays ready.

## Related Issues

- #894 — ADO MCP keeps disconnecting (likely same root cause: agency per-request spawn kills long-lived MCP connections)
- #288 — ADO MCP connected but frequently fails (same pattern — HTTP MCP connections dropped between agency spawns)
- #587 — Provide more actionable details for MCP failures (the timeout error surface is opaque to users)
- #104 — MCP Auth failures aren't visible (related: failure visibility)
- #836 — Model picker empty on launch due to request cancellation (closed; different root cause but same symptom: `list_models` cancelled)
- #54 — Request to add Agency support to the app (this was implemented, but the per-request spawn architecture has scaling issues)

## Environment

| Field | Value |
| --- | --- |
| App version | 0.2.32 |
| OS | Windows 10.0.26100 |
| Theme | GitHub |
| Path | /chat |
| Tenure | Week 4 |

## MCP Configuration (14 servers total)

- 10× `type: "http"` — pre-hosted MCP servers on localhost (already running, only need TCP handshake)
- 3× `type: "local"` — spawned via npx/pnpm
- 1× `type: "http"` — remote endpoint

## Reproduction Steps

1. Configure `~/.copilot/mcp-config.json` with 14 MCP servers (mix of http and local types)
2. Launch the Copilot App (v0.2.32)
3. Observe the app UI shows errors / never loads models or agents

## Expected Behavior

App initializes and connects to all configured MCPs (as the CLI does successfully with the same config).

## Actual Behavior

Every agency.exe spawn times out at ~2.5s. The app enters a retry loop:

```
01:28:19.816 INFO agency_mode feature flag enabled; spawning copilot via agency wrapper
01:28:22.299 WARN Failed to initialize runtime telemetry client attempt=1 error=request cancelled
01:28:22.315 WARN resume_session failed (retry 1/3), retrying in 1s: request cancelled
01:28:22.325 ERROR failed to list models error=request cancelled
01:28:25.296 WARN resume_session failed (retry 2/3), retrying in 2s: request cancelled
01:28:29.720 WARN resume_session failed (retry 3/3), retrying in 4s: request cancelled
01:28:36.442 ERROR getSessionState: failed error=request cancelled
```

Timing: spawn at `19.816`, first cancel at `22.299` = **2.48 seconds** hard deadline. The pattern repeats for every request type — each spawning a new agency.exe that independently times out.

## Workaround

Reducing `mcp-config.json` to ≤4 servers allows the app to start successfully — agency.exe can initialize within the deadline with fewer MCPs.

## Suggested Fixes

1. **Keep agency alive between requests** — spawn once, reuse for subsequent requests (like the CLI architecture). This is the root architectural difference.
2. **Increase the deadline** — 2.5s is too tight for power users with many MCPs. Even pre-hosted HTTP MCPs need connection handshakes.
3. **Lazy-init MCP connections** — don't block the initial response on all MCP connections being established. Initialize MCPs in the background.
4. **Separate MCP init from request readiness** — allow basic requests (list_models, telemetry) to succeed before all MCPs are connected.

## Logs

Full log available at `~/.copilot/logs/github-app.{pid}.log`. The pattern shows 10+ agency.exe spawns in 40 seconds, all failing identically with the same ~2.5s timeout.

---
| Field | Value |
| --- | --- |
| App version | 0.2.32 |
| OS | Windows 10.0.26100 |
| Path | /chat |