Breaking Change: .vscode/mcp.json is no longer supported

[kchungmsft]

Describe the bug

#39 requested that VSCode's mcp.json support be added, but this capability was recently removed. This means we need to maintain multiple sets of MCP.json files to maintain parity between our CLI users and our VSCode Copilot users.

Affected version

1.0.37

Steps to reproduce the behavior

1. Start github copilot CLI in a repo with .vscode/mcp.json
2. /mcp
3. You won't see the MCP servers

Expected behavior

We should have the MCP servers that are defined in .vscode/mcp.json

Additional context

No response

[JohnLBergqvist]

Copilot CLI points us to this document, which says that we should use .mcp.json (which VSCode doesn't support) instead of .vscode/mcp.json (both at the project root) - i've summarised the 3 locations below.

MCP Configuration Locations for GitHub Copilot CLI

Summary

File	Scope	Key	Read by
~/.mcp-config.json	User-level	"mcpServers"	Copilot CLI only
.mcp.json (project root)	Project-level	"mcpServers"	Copilot CLI only
.vscode/mcp.json (project root)	Project-level	"servers"	VS Code only

Notes

• Copilot reads both ~/.mcp-config.json (user-level) and .mcp.json (project-level) simultaneously.
• As of Copilot CLI v1.0.39, .vscode/mcp.json is no longer read by the Copilot CLI, even if present in the project root.
• VS Code only picks up .vscode/mcp.json — it does not read .mcp.json or ~/.mcp-config.json.
• There is no shared cross-client config file format between VS Code and Copilot CLI.

[stephbu]

Thinking about our copilot usage...

• I want to layer user, org, and project configurations
• I'd add VS into the toolchain mix here too
• I want one format, that I can compose to reflect organization, team and project objectives, that works across all toolchains.