System/Tools consume 73% of context window (146k/200k), triggering auto-compaction on first message

[MadEste]

With multiple MCP servers and plugins configured, the System/Tools section consumes 146k tokens — 73% of the 200k context window. This leaves negative free space before the user sends their first message, causing immediate auto-compaction in brand new sessions.

Reproduction

1. Configure ~10 MCP servers (mix of builtin and custom)
2. Install plugins that register additional tools and skills
3. Have custom instruction files in ~/.copilot/copilot-instructions.md and .github/instructions/
4. Start a new session
5. Run /context

System/Tools: 146.4k (73%)
Messages: 1.2k (1%)
Free Space: -18383 (-9%)
Buffer: 70.8k (35%)

Auto-compaction fires after the first interaction (~100 credits used), despite no meaningful conversation history to compact.

Environment

• Copilot CLI v1.0.55-1
• Windows 11, PowerShell
• Model: Internal model
• ~10 MCP servers configured across user and org plugins

Impact

• Effectively unusable for multi-turn conversations without constant compaction
• Credits wasted on compaction rather than productive work
• Users with enterprise MCP setups hit this silently with no warning

[MadEste]

Update: Root cause narrowed to CLI version change

After further investigation, I found a 5.4x increase in system/tools overhead between CLI patch versions on the same machine, same model, same config:

Metric	1.0.55-1	1.0.55-5	Delta
System/Tools	26.1k (13%)	140.5k (70%)	+114k (+5.4x)
Free Space	91.3k (46%)	-11.3k (-6%)	-102k
Usable?	✅ Yes	❌ No

Both sessions: same machine, same model same working directory, same 200k window, same 70.8k buffer, same MCP/plugin config. No user config changes between versions — the CLI auto-updated mid-day.

A session started on 1.0.55-1 earlier today is still working fine with 91k free. Every new session on 1.0.55-5 starts with negative free space and compacts after the first message.

[Sockolet]

This is happening to me as well. Compacting after first message and then a loop of compactions that never ends.

[zahalzel]

This is a huge blocker, even when the 1 million context window is set, I only get 200k and compaction loops are frequent: