VS Code Silently Replaces 'Local' Agent with Copilot

Developer David Alsh (alshdavid) opened bug report #340651 in microsoft/vscode: in 1.142.0-insider, when creating a new chat in agent mode, the selected 'Local' agent is silently reset to Copilot, and requests are sent to the free tier mai-code-flash, which, according to the author, collects data.

Compiled by Sergey KostenchukPublished 2026-10-09Updated 2026-10-09

2026-10-09 Coding Microsoft

💻 VS Code Silently Replaces 'Local' Agent with Copilot

Developer David Alsh opened bug report #340651: in VS Code 1.142.0-insider, when creating a new chat in agent mode, the selected 'Local' agent is reset to Copilot, and requests are sent to the free tier mai-code-flash, which, according to the author, collects data. The bug reproduces even with extensions disabled; the issue is open and currently has no fix.

🌍 The bug undermines trust in BYO configurations: an explicitly selected model — a local server or a paid API key — is silently replaced by Microsoft's cloud provider, and the agent setting does not guarantee the request route.

👤 If you work with local models or your own API keys in VS Code insiders, check the agent selection after each 'New chat': prompts and code may be sent to mai-code-flash without your knowledge. Keep an eye on issue #340651 — confirmations from other users will appear there.

Source 1: https://github.com/microsoft/vscode/issues/340651

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