[VS Code] MCP tools don't reconnect to existing Copilot Chat session after extension host restart

[mfraile]

Description

When the VS Code extension host shuts down and restarts (which can happen for various reasons — extension updates, memory pressure, crashes), the Engram MCP stdio server is killed along with it. The server restarts successfully and re-discovers all 15 tools, but existing Copilot Chat sessions lose access to all mem_* tools permanently.

The only fix is to close the chat and start a new one — but there's no visible indicator to the user that tools have disconnected. This causes silent memory loss for the affected session.

Evidence from MCP output log

2026-04-06 11:27:19.994 [warning] Extension host shut down, server will stop.
2026-04-06 11:27:19.994 [info] Connection state: Stopped
2026-04-06 11:28:17.569 [info] Starting server engram
2026-04-06 11:28:17.569 [info] Connection state: Starting
2026-04-06 11:28:17.570 [info] Connection state: Running
2026-04-06 11:28:17.770 [info] Discovered 15 tools

Server restarts and discovers tools, but the active Copilot Chat session reports tools as "disabled by the user" when the agent tries to call them.

Environment

• Engram: v1.11.0 (Homebrew)
• VS Code: 1.113.0
• OS: macOS 26.3.1 (Mac Mini M4 Pro)
• MCP config: Workspace .vscode/mcp.json with stdio transport

{
  "servers": {
    "engram": {
      "type": "stdio",
      "command": "engram",
      "args": ["mcp"],
      "env": {
        "ENGRAM_PROJECT": "naos-factory"
      }
    }
  }
}

Impact

• Silent session memory loss — user has no idea Engram disconnected. An entire day's work can go unrecorded (happened April 5, 2026 — full session lost)
• No self-healing — restarting the server from MCP panel doesn't re-bind tools to the active chat
• User must know the workaround — close chat and open a new one

Suggested improvements

1. Document this limitation in docs/AGENT-SETUP.md under VS Code — warn users that extension host restarts break MCP tool bindings in active chats
2. Consider VS Code Chat Plugin API support (chat.pluginLocations + chat.plugins.enabled) which provides lifecycle hooks with health checks and auto-restart (ref: felifranco/engram-vscode-plugin)
3. This may also warrant a VS Code upstream issue — the MCP runtime should re-bind tools to active chat sessions after server reconnection

Note

This is likely a VS Code MCP runtime limitation rather than an Engram bug. However, since VS Code is a documented first-class agent in Engram's setup guide, it's worth tracking here and documenting the workaround. The OpenCode plugin doesn't have this problem because it manages its own session resilience via ensureSession().