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Claude Code's New AGENTS.md Support Silently Fails When Telemetry Is Disabled
A bug in Claude Code 2.1.277 means the newly added AGENTS.md loader only works when telemetry is enabled, silently skipping the file for privacy-conscious developers. A workaround using a one-line CLAUDE.md is available until the fix ships.
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Claude Code version 2.1.277 introduced support for AGENTS.md, a configuration file meant to serve as a fallback when a project has no CLAUDE.md present. In theory, the update should have made it easier for developers to standardize agent instructions across projects without needing a separate file. In practice, the feature does not work as advertised for a specific but common group of users.
According to a report highlighted on Hacker News, the AGENTS.md loader is gated behind a remote feature flag. When telemetry or other nonessential network traffic is disabled in the shell, that flag never gets checked, and Claude Code silently skips the local AGENTS.md file. No warning or error is shown, meaning the tool simply behaves as though the file does not exist.
The issue was surfaced and documented in GitHub issue #95690, where the author of the original post says they added their own measurements after noticing the file was never loading in their repositories. The write-up on the engineering blog notes that the author normally keeps telemetry off, which meant the new AGENTS.md support had effectively no impact on their workflow until they diagnosed the cause.
As a workaround, the author has been relying on a single-line CLAUDE.md file instead of waiting for the flag-gating behavior to be resolved. Details of the exact contents of that workaround were not fully specified in the available material, but the broader point is straightforward: anyone who has disabled telemetry or nonessential traffic in Claude Code should not assume AGENTS.md is being read, even after upgrading to a version that claims to support it.
The issue has reportedly been acknowledged, with some references describing it as fixed, though the available source material does not independently confirm the full scope or timeline of that fix. Developers who depend on AGENTS.md for project configuration are advised to verify directly, in their own environment, that the file is actually being loaded rather than assuming the documented behavior matches what ships in their installed version.