[Bug]: MCP proxy does not forward text/event-stream incrementally

Please select the area the issue is related to

AI Workspace

Please select the aspect the issue is related to

Aspect/API (API backends, definitions, contracts, interfaces, OpenAPI), Aspect/AI (AI/LLM integration, MCP, AI readiness)

Description

Summary

text/event-stream responses from an MCP server are buffered by the gateway and released only after the backend finishes. Clients get all SSE events in one burst instead of incrementally, so streaming tools give no live feedback.

Expected: events forwarded as the backend emits them.
Actual: nothing until the tool completes, then all events at once.

Steps to Reproduce

1. Run an MCP server over Streamable HTTP with a tool that emits notifications/progress every 1 second before returning (e.g. count to 4).
2. Create an MCP proxy pointing at that backend.
3. Call the tool through the proxy URL and record when each SSE event arrives, all arrive together at ~4s.
4. Repeat directly against the backend URL

Severity Level of the Issue

Severity/Major (Important functionality is broken. Should be prioritized. Doesn't need immediate attention)

Environment Details (with versions)

wso2apip-ai-gateway 1.2.0-beta, ai-workspace 1.0.0-beta

Start by reproducing the issue with an MCP server over Streamable HTTP that emits notifications/progress every second, then compare event timing through the proxy URL with the backend URL. Trace the proxy's response handling and verify that text/event-stream events arrive incrementally before the tool completes, rather than in one burst.