diff --git a/core/Azure.Mcp.Core/src/Areas/Server/Commands/Runtime/McpRuntime.cs b/core/Azure.Mcp.Core/src/Areas/Server/Commands/Runtime/McpRuntime.cs
index 0b614d38a3..7000cd1469 100644
--- a/core/Azure.Mcp.Core/src/Areas/Server/Commands/Runtime/McpRuntime.cs
+++ b/core/Azure.Mcp.Core/src/Areas/Server/Commands/Runtime/McpRuntime.cs
@@ -77,10 +77,6 @@ public async ValueTask<CallToolResult> CallToolHandler(RequestContext<CallToolRe
 
         activity?.AddTag(TagName.ToolName, request.Params.Name);
 
-        // Assume that this is a BaseCommand<T>.  If not, the tag will be updated in 
-        // the children ToolLoaders.
-        activity?.AddTag(TagName.IsServerCommandInvoked, true);
-
         var symbol = OptionDefinitions.Common.Subscription;
 
         var subscriptionArgument = request.Params?.Arguments?
diff --git a/core/Azure.Mcp.Core/src/Areas/Server/Commands/ToolLoading/NamespaceToolLoader.cs b/core/Azure.Mcp.Core/src/Areas/Server/Commands/ToolLoading/NamespaceToolLoader.cs
index 65ba937193..f377f23569 100644
--- a/core/Azure.Mcp.Core/src/Areas/Server/Commands/ToolLoading/NamespaceToolLoader.cs
+++ b/core/Azure.Mcp.Core/src/Areas/Server/Commands/ToolLoading/NamespaceToolLoader.cs
@@ -173,8 +173,6 @@ public override async ValueTask<CallToolResult> CallToolHandler(RequestContext<C
 
             if (learn && string.IsNullOrEmpty(command))
             {
-                activity?.SetTag(TagName.IsServerCommandInvoked, false);
-
                 return await InvokeToolLearn(request, intent ?? "", tool, cancellationToken);
             }
             else if (!string.IsNullOrEmpty(tool) && !string.IsNullOrEmpty(command))
@@ -271,6 +269,7 @@ private async Task<CallToolResult> InvokeChildToolAsync(
             };
         }
 
+        Activity.Current?.SetTag(TagName.IsServerCommandInvoked, true);
         IReadOnlyDictionary<string, IBaseCommand> namespaceCommands;
         try
         {
@@ -466,6 +465,7 @@ There was an error finding or calling tool and command.
 
     private async Task<CallToolResult> InvokeToolLearn(RequestContext<CallToolRequestParams> request, string? intent, string namespaceName, CancellationToken cancellationToken)
     {
+        Activity.Current?.SetTag(TagName.IsServerCommandInvoked, false);
         var toolsJson = GetChildToolListJson(request, namespaceName);
 
         var learnResponse = new CallToolResult
diff --git a/core/Azure.Mcp.Core/src/Areas/Server/Commands/ToolLoading/ServerToolLoader.cs b/core/Azure.Mcp.Core/src/Areas/Server/Commands/ToolLoading/ServerToolLoader.cs
index bc41832413..4eabe7940b 100644
--- a/core/Azure.Mcp.Core/src/Areas/Server/Commands/ToolLoading/ServerToolLoader.cs
+++ b/core/Azure.Mcp.Core/src/Areas/Server/Commands/ToolLoading/ServerToolLoader.cs
@@ -9,6 +9,7 @@
 using ModelContextProtocol;
 using ModelContextProtocol.Client;
 using ModelContextProtocol.Protocol;
+using static Azure.Mcp.Core.Services.Telemetry.TelemetryConstants;
 
 namespace Azure.Mcp.Core.Areas.Server.Commands.ToolLoading;
 
@@ -139,8 +140,6 @@ public override async ValueTask<CallToolResult> CallToolHandler(RequestContext<C
         {
             if (learn && string.IsNullOrEmpty(command))
             {
-                Activity.Current?.SetTag(TelemetryConstants.TagName.IsServerCommandInvoked, false);
-
                 return await InvokeToolLearn(request, intent ?? "", tool, cancellationToken);
             }
             else if (!string.IsNullOrEmpty(tool) && !string.IsNullOrEmpty(command))
@@ -244,6 +243,7 @@ private async Task<CallToolResult> InvokeChildToolAsync(RequestContext<CallToolR
             }
 
             // At this point we should always have a valid command (child tool) call to invoke.
+            Activity.Current?.SetTag(TagName.IsServerCommandInvoked, true);
             await NotifyProgressAsync(request, $"Calling {tool} {command}...", cancellationToken);
             var toolCallResponse = await client.CallToolAsync(command, parameters, cancellationToken: cancellationToken);
             if (toolCallResponse.IsError is true)
@@ -319,6 +319,7 @@ There was an error finding or calling tool and command.
 
     private async Task<CallToolResult> InvokeToolLearn(RequestContext<CallToolRequestParams> request, string? intent, string tool, CancellationToken cancellationToken)
     {
+        Activity.Current?.SetTag(TagName.IsServerCommandInvoked, false);
         var toolsJson = await GetChildToolListJsonAsync(request, tool);
 
         var learnResponse = new CallToolResult
diff --git a/core/Azure.Mcp.Core/src/Areas/Server/Commands/ToolLoading/SingleProxyToolLoader.cs b/core/Azure.Mcp.Core/src/Areas/Server/Commands/ToolLoading/SingleProxyToolLoader.cs
index 99400ca9a7..f0b9942df9 100644
--- a/core/Azure.Mcp.Core/src/Areas/Server/Commands/ToolLoading/SingleProxyToolLoader.cs
+++ b/core/Azure.Mcp.Core/src/Areas/Server/Commands/ToolLoading/SingleProxyToolLoader.cs
@@ -8,6 +8,7 @@
 using ModelContextProtocol;
 using ModelContextProtocol.Client;
 using ModelContextProtocol.Protocol;
+using static Azure.Mcp.Core.Services.Telemetry.TelemetryConstants;
 
 namespace Azure.Mcp.Core.Areas.Server.Commands.ToolLoading;
 
@@ -132,8 +133,6 @@ public override async ValueTask<CallToolResult> CallToolHandler(RequestContext<C
             learn = true;
         }
 
-        Activity.Current?.SetTag(TelemetryConstants.TagName.IsServerCommandInvoked, !learn);
-
         if (learn && string.IsNullOrEmpty(tool) && string.IsNullOrEmpty(command))
         {
             return await RootLearnModeAsync(request, intent ?? "", cancellationToken);
@@ -206,6 +205,7 @@ private async Task<string> GetToolListJsonAsync(RequestContext<CallToolRequestPa
 
     private async Task<CallToolResult> RootLearnModeAsync(RequestContext<CallToolRequestParams> request, string intent, CancellationToken cancellationToken)
     {
+        Activity.Current?.SetTag(TagName.IsServerCommandInvoked, false);
         var toolsJson = await GetRootToolsJsonAsync();
         var learnResponse = new CallToolResult
         {
@@ -236,6 +236,7 @@ Here are the available list of tools.
 
     private async Task<CallToolResult> ToolLearnModeAsync(RequestContext<CallToolRequestParams> request, string intent, string tool, CancellationToken cancellationToken)
     {
+        Activity.Current?.SetTag(TagName.IsServerCommandInvoked, false);
         var toolsJson = await GetToolListJsonAsync(request, tool);
         if (string.IsNullOrEmpty(toolsJson))
         {
@@ -272,6 +273,7 @@ private async Task<CallToolResult> ToolLearnModeAsync(RequestContext<CallToolReq
 
     private async Task<CallToolResult> CommandModeAsync(RequestContext<CallToolRequestParams> request, string intent, string tool, string command, Dictionary<string, object?> parameters, CancellationToken cancellationToken)
     {
+        Activity.Current?.SetTag(TagName.IsServerCommandInvoked, true);
         McpClient? client;
 
         try
diff --git a/core/Azure.Mcp.Core/src/Commands/CommandFactory.cs b/core/Azure.Mcp.Core/src/Commands/CommandFactory.cs
index ab0325b89b..f4c02b92ac 100644
--- a/core/Azure.Mcp.Core/src/Commands/CommandFactory.cs
+++ b/core/Azure.Mcp.Core/src/Commands/CommandFactory.cs
@@ -175,7 +175,7 @@ private void ConfigureCommands(CommandGroup group)
 
     private void ConfigureCommandHandler(Command command, IBaseCommand implementation)
     {
-        command.SetAction(async (ParseResult parseResult, CancellationToken ct) =>
+        command.SetAction(async (parseResult, ct) =>
         {
             _logger.LogTrace("Executing '{Command}'.", command.Name);
 
diff --git a/core/Azure.Mcp.Core/src/Services/Telemetry/TelemetryService.cs b/core/Azure.Mcp.Core/src/Services/Telemetry/TelemetryService.cs
index 1165027ca7..9f67329095 100644
--- a/core/Azure.Mcp.Core/src/Services/Telemetry/TelemetryService.cs
+++ b/core/Azure.Mcp.Core/src/Services/Telemetry/TelemetryService.cs
@@ -1,8 +1,6 @@
 // Copyright (c) Microsoft Corporation.
 // Licensed under the MIT License.
 
-using System.Collections.Generic;
-using System.Collections.Immutable;
 using System.Diagnostics;
 using Azure.Mcp.Core.Areas.Server.Options;
 using Azure.Mcp.Core.Configuration;
@@ -42,10 +40,10 @@ public TelemetryService(IMachineInformationProvider informationProvider,
         ILogger<TelemetryService> logger)
     {
         _isEnabled = options.Value.IsTelemetryEnabled;
-        _tagsList = new List<KeyValuePair<string, object?>>()
-        {
+        _tagsList =
+        [
             new(TagName.AzureMcpVersion, options.Value.Version),
-        };
+        ];
 
         if (serverOptions?.Value != null)
         {
@@ -68,7 +66,7 @@ public TelemetryService(IMachineInformationProvider informationProvider,
         }
 
         CheckInitialization();
-        return _tagsList.ToImmutableList();
+        return [.. _tagsList];
     }
 
     /// <summary>
diff --git a/servers/Azure.Mcp.Server/CHANGELOG.md b/servers/Azure.Mcp.Server/CHANGELOG.md
index 6a9747b508..4e726db795 100644
--- a/servers/Azure.Mcp.Server/CHANGELOG.md
+++ b/servers/Azure.Mcp.Server/CHANGELOG.md
@@ -12,6 +12,8 @@ The Azure MCP Server updates automatically by default whenever a new release com
 
 ### Other Changes
 
+- Updated how `IsServerCommandInvoked` telemetry is captured to more correctly report whether learning or tool call was performed. [[#874](https://github.com/microsoft/mcp/pull/874)]
+
 ## 0.9.4 (2025-10-17)
 
 ### Features Added