MCP server 'blocked by policy'
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Description
### Describe the bug
We have a custom MCP registry which is checked when local MCP servers are configured. Although the local MCP configuration is correct and works just fine within VSCode and IntelliJ plugin, an error message 'MCP server is blocked by policy' is shown.
It is unclear what causes this. The process log mentions the following:
```
2026-06-25T11:40:36.761Z [ERROR] MCP server "io.github.sooperset/mcp-atlassian" filtered: Server "io.github.sooperset/mcp-atlassian" found in registry but local configuration does not match the registered server identity
```
### Affected version
GitHub Copilot CLI 1.0.65
### Steps to reproduce the behavior
1. Configure an MCP server in the mcp-config.json in the ~/.copilot directory or just install it from within the Copilot CLI with `/mcp add`
2. The MCP server is blocked
### Expected behavior
_No response_
### Additional context
_No response_
Contributor guide
Research direction
Reproduce the block using mcp-config.json in ~/.copilot or the /mcp add entry point, then inspect the process log for the registry identity mismatch. Done means a correctly configured local MCP server is accepted instead of reported as blocked by policy.
Written by the indexing model from the issue text.
Assessment
- Domain
- cli, security
- Issue type
- Bug
- Difficulty
- 3/5
- Estimated time
- 1-2 days
- Activity status
- Quiet
- Clarity
- Needs clarification
- Newbie friendliness
- 38/100