Copilot Agent Host not respecting workspace chat.tools.terminal.autoApprove

Type: Bug

In a standard repo with a node project and a package.json file. Add a new command that would require terminal approval in a chat e.g. "npm run myNewCommand"

In a .vscode/settings.json file add it to chat.tools.terminal.autoApprove to make it auto approve.

Run this in the "Local" harness in chat and it will autoapprove when you ask the model to run it.
Run this in the "Copilot" harness in chat and it will ask you for permission.

It seems that the Copilot harness does not properly read chat.tools.terminal.autoApprove that exists in a workspace. If I add it to my user settings file it works correctly.

VS Code version: Code 1.137.0 (645f29cc3176500b4b5762ba887cf2a7f0ffdf2c, 2026-09-08T13:43:59-07:00)
OS version: Windows_NT x64 10.0.26200
Modes:

System Info

|Item|Value|
|---|---|
|CPUs|Intel(R) Core(TM) i7-9700K CPU @ 3.60GHz (8 x 3600)|
|GPU Status|2d_canvas: enabled
GPU0: VENDOR= 0x1002, DEVICE=0x7550 [AMD Radeon RX 9070 XT], DRIVER_VENDOR=AMD, DRIVER_VERSION=32.0.22042.14002 *ACTIVE*
GPU1: VENDOR= 0x1002, DEVICE=0x7550 [AMD Radeon RX 9070 XT], DRIVER_VERSION=32.0.22042.14002
GPU2: VENDOR= 0x1414, DEVICE=0x008c [Microsoft Basic Render Driver], DRIVER_VERSION=10.0.26100.9278
Machine model name:
Machine model version:
direct_rendering_display_compositor: disabled_off_ok
gpu_compositing: enabled
multiple_raster_threads: enabled_on
opengl: enabled_on
rasterization: enabled
raw_draw: disabled_off_ok
skia_graphite: disabled_off
trees_in_viz: disabled_off
video_decode: enabled
video_encode: enabled
webgl: enabled
webgpu: enabled
webnn: disabled_off|
|Load (avg)|undefined|
|Memory (System)|31.94GB (9.52GB free)|
|Process Argv|--crash-reporter-id c3ea5f10-fd92-4980-ba90-6729c770773f|
|Screen Reader|no|
|VM|0%|
Extensions (19)

Name|Identifier|Author|Version
---|---|---|---
ESLint|dbaeumer.vscode-eslint|dbaeumer|3.0.34
Prettier - Code formatter|esbenp.prettier-vscode|esbenp|12.4.0
GitHub Actions|github.vscode-github-actions|github|0.32.3
GitHub Pull Requests|github.vscode-pull-request-github|GitHub|0.166.1
Container Tools|ms-azuretools.vscode-containers|ms-azuretools|2.5.1
Docker|ms-azuretools.vscode-docker|ms-azuretools|2.0.0
.NET Install Tool|ms-dotnettools.vscode-dotnet-runtime|ms-dotnettools|3.1.0
Python Debugger|ms-python.debugpy|ms-python|2026.6.0
Python|ms-python.python|ms-python|2026.4.0
Pylance|ms-python.vscode-pylance|ms-python|2026.3.1
Python Environments|ms-python.vscode-python-envs|ms-python|1.36.0
Remote - SSH|ms-vscode-remote.remote-ssh|ms-vscode-remote|0.128.0
Remote - SSH: Editing Configuration Files|ms-vscode-remote.remote-ssh-edit|ms-vscode-remote|0.87.0
WSL|ms-vscode-remote.remote-wsl|ms-vscode-remote|0.104.3
Remote Explorer|ms-vscode.remote-explorer|ms-vscode|0.5.0
Flame Chart Visualizer for JavaScript Profiles|ms-vscode.vscode-js-profile-flame|ms-vscode|1.0.11
Markdown Preview Enhanced|shd101wyy.markdown-preview-enhanced|shd101wyy|0.8.35
Vitest|vitest.explorer|vitest|1.52.0
NGINX Configuration|william-voyek.vscode-nginx|william-voyek|0.7.2

A/B Experiments

```
vsliv368:30146709
binariesv615:30325510
nativeloc1:31344060
dwcopilot:31170013
dwoutputs:31242946
copilot_t_ci:31333650
e5gg6876:31282496
pythonrdcb7:31342333
6518g693:31463988
aj953862:31281341
envsactivate1:31551504
gh487529:31544284
cloudbuttont:31379625
3efgi100_wstrepl:31403338
55ia6109:31457054
ec5jj548:31422691
cp_cls_t_966_ss:31526232
4je02754:31466945
c3h7c220:31478652
cp_cls_c_1081:31454833
conptydll_true:31498968
e9c30283:31461165
46204921:31447328
control_6dc23131:31582662
ei9d7968:31496641
chat:31457767
8hig5102:31480529
89g7j272:31518289
i2gc6536:31499202
52612955:31516516
23c7c724:31520045
ddid_c:31478207
hmra_i5g22:31518061
ja75b849_copy:31580634
7df3h592:31512476
cp_cls_t_1082:31535311
logging_enabled_new:31498466
db5d2638:31499441
jb_cp_cls_t_632:31543129
56dj4588:31512888
32d76977:31512328
ha629193:31508444
a1ije391_t:31540920
jbcp_cls_pctr_t:31531130
cp_intellij_t_nes:31548657
d7b18187:31526828
ahp-both-windows:31556933
ihg5j128:31534457
7g2b5551:31542111
enable_editor_pane_layout:31569726
allow-none:31555437
36h42362:31564511
c7c27ce7:31554789
1h923230:31564177
treatment-23-1:31555779
unuse_dynamic_mcp:31555281
0d8dfbc3:31570291
a1hcc538:31559322
nemo-v2:31565334
0c1h4866:31566224
session-mark-done:31558131
5b8j3302:31564601
autotiers:31584978
mangle-name-treatment:31572634
allow-signed-out:31584137
intellij_nes_preview_t:31580086
multiv2:31574985
0ec91c74:31585910
outline:31581109
aw-autom-on:31583758
revealsession_treatment_7ed7e840:31582194
7g328426_fixed:31584544
permission_prompt_control:1332567
ccr_pr_nudge_auto_review:1319472
vsc_wsm_t:1340632
14b85561:1348997
cfee5631:1379228
3aced641:1389836

```