Copilot Chat v0.40.2026031301: CLI & Debug Fixes

TL;DR

• Chat debug now caps file size per-file to prevent unbounded growth
• Copilot CLI improvements: better session detection, exit plan mode handling, terminal link provider
• Customization variables no longer leak into CLI prompt context

New

• Terminal link provider for Copilot CLI — Adds clickable terminal links for CLI output integration in VS Code
• Plan exit mode support in CLI — ExitPlanMode tool now respects its own approval flow instead of following auto-approve
• Per-file chat debug size capping — Prevents debug logs from growing unbounded by enforcing per-file limits
• User-visible chat debug settings — New settings for controlling chat debug file logging behavior
• Local customizations support — Allows local customization configurations

Fixed

• Customization variables in CLI context — Customization variables no longer included in CLI prompt context
• Troubleshoot command session detection — Improved reliability of session detection in troubleshoot commands
• Tool search results handling — Messages API now conditionally handles tool search results based on valid tool names
• Failed chat session loads — Added issue reporting for failed chat session loads in Copilot CLI
• Endpoint throttling — Different throttlers now used per endpoint for better rate limiting
• Windows repo performance telemetry — Enhanced repo info telemetry checks to support Windows repo perf issues

Changed

• Background Agent → Copilot CLI naming — Renamed all references from "Background Agent" to "Copilot CLI" for consistency
• GitHub Copilot npm dependency — Updated to latest version
• User guide updates — Documentation now includes Sessions view and related features, plus Claude session target integration

Update via VS Code extensions marketplace or run: code --install-extension GitHub.Copilot-Chat

Source: Copilot Chat