Copilot CLI loops infinitely and fails apply_patch due to JSON-wrapping error

Describe the bug

While executing regular coding tasks that require file modifications, the Copilot CLI frequently fails to apply patches. The CLI enters a loop where it attempts to edit a file, fails with a JSON-wrapping error, and retries the exact same payload repeatedly.

This causes a task that should take 2 steps to take 30+ steps, resulting in massive latency, tool frustration, and high token consumption before it either randomly recovers or fails entirely. Many models are failing to adapt to apply_patch. I havent seen issue with sonnet 4.6 and gpt-sol but other models like sonnet 5, luna, terra are failing most of the times.

Error Message / Trace
When the CLI attempts to apply an edit, it outputs the following error:

✗ Edit 
 └ Failed to parse patch: The first line of the patch must be '*** Begin Patch' 
   The input begins with '{' and appears to be JSON-wrapped. apply_patch is a 
   freeform tool; pass raw patch text directly. Do not retry this payload.

Behavior Details
Infinite Loop: Once this error is triggered, the model consistently retries the same payload 10 to 30+ times in a row despite the warning "Do not retry this payload".

Temporary Recovery: Eventually, the model might format the tool call correctly by accident, but the error quickly resurfaces on subsequent edits.

CLI vs. VS Code: This behavior is highly localized to the CLI. Using the same prompts and models in the VS Code Copilot Chat interface works perfectly without any patch-parsing issues.

Affected version

GitHub Copilot CLI 1.0.80

Steps to reproduce the behavior

This is intermittent but seen in most of medium complexity prompts.

• Open Terminal ( I did on iterm)
• start interactive session (copilot) - i did not append any flag options ( i opened a session on TMUX)
• Trigger a medium complexity prompt which would need to change your sourcecode files.
• It should trigger the error - It generally happens mid sessions not in the first prompt itself. but yea this is intermittent behaviour

Expected behavior

No response

Additional context

• OS: Ubuntu server
  Tool: Github Copilot CLI (Latest Version)
  Comparison: Not observed in VS Code Copilot Chat (works successfully there)
  LLM Models tried : Both GPT-5.6-Luna and Claude-sonnet-5

Không có tệp mã nguồn hoặc bài kiểm thử nào được nêu. Hãy bắt đầu bằng cách tái hiện vấn đề trong Copilot CLI 1.0.80 trên Ubuntu, sử dụng một phiên tương tác và một prompt lập trình mức trung bình có chỉnh sửa tệp, sau đó so sánh hành vi của CLI với VS Code Copilot Chat. Được xem là hoàn tất khi apply_patch chấp nhận payload của công cụ và CLI không còn thử lại cùng một yêu cầu bị lỗi.