[High] Reliability: Fix parent chat failure state after unmapped Copilot subagent errors

src/vs/platform/agentHost/AGENTS.md

@@ -680,6 +680,8 @@ Each additional chat is backed by a fresh top-level SDK session (`sdkSessionId =
 
 ### Copilot (`node/copilot/copilotAgent.ts`)
 
+SDK `session.error` events with an `agentId` belong to that child. Route them only through its tracked tool-call identity; if the child is unmapped, retain diagnostics without emitting a root chat error or ending the root turn. Child failures do not finalize root tool-call accounting.
+
 `AgentConfigurationService.copilotM365EnabledAtStartup` captures the validated `m365Enabled` root value once after loading persisted configuration. Only `true` enables it; missing or invalid values leave it off. The root value remains live requested configuration, while the effective value stays fixed for that Agent Host lifetime. A new host reads the persisted request; restarting VS Code recreates the local host. Reloading a window, connecting another client, or restarting only the Copilot SDK runtime does not recapture the value in an existing host. This is a host-lifetime snapshot, not a separate application-lifetime latch, and does not initiate account discovery, choose a service or migrate history.
 
 Copilot also has no AH-session container:

src/vs/platform/agentHost/node/copilot/copilotAgentSession.ts

@@ -11988,13 +11988,14 @@ export class CopilotAgentSession extends Disposable {
 			} else {
 				reportError();
 			}
+			if (this._shouldDropUnmappedSubagentEvent(e, 'session.error')) {
+				return;
+			}
 			const parentToolCallId = this._parentToolCallIdForSubagentEvent(e);
-			if (turn) {
+			if (turn && !parentToolCallId) {
 				this._reportToolCallDetails(turn, 'failed');
-				if (!parentToolCallId) {
-					turn.mcpUsage?.complete('failed');
-					this._attributeLocalModelTurn(turn.id);
-				}
+				turn.mcpUsage?.complete('failed');
+				this._attributeLocalModelTurn(turn.id);
 			}
 			this._emitAction({
 				type: ActionType.ChatError,

src/vs/platform/agentHost/test/node/copilotAgentSession.test.ts

@@ -27078,7 +27078,55 @@ Use the attached image as context.
 			}]);
 		});
 
-		test('unmapped subagent error event is forwarded as non-resumable', async () => {
+		test('root quota error still ends the parent turn', async () => {
+			const { session, mockSession, signals } = await createAgentSession(disposables);
+			session.resetTurnState('root-turn');
+			mockSession.fire('session.error', {
+				errorType: 'quota', message: 'Copilot premium request allowance exhausted', statusCode: 402,
+			});
+
+			assert.deepStrictEqual({
+				hasActiveTurn: session.hasActiveTurn,
+				errors: signals.flatMap(signal => isAction(signal, ActionType.ChatError) ? [signal.parentToolCallId] : []),
+			}, { hasActiveTurn: false, errors: [undefined] });
+		});
+
+		for (const mapped of [false, true]) {
+			test(`subagent quota error preserves the running parent turn (mapped=${mapped})`, async () => {
+				const { session, mockSession, signals } = await createAgentSession(disposables);
+				session.resetTurnState('byok-parent');
+				mockSession.fire('assistant.turn_start', { turnId: 'sdk-parent' });
+				if (mapped) {
+					mockSession.fire('subagent.started', {
+						toolCallId: 'child-task', agentName: 'explore', agentDisplayName: 'Explore', agentDescription: 'Explore tests',
+					}, { agentId: 'child-agent' });
+				}
+				signals.length = 0;
+
+				mockSession.fire('session.error', {
+					errorType: 'quota', message: 'Copilot premium request allowance exhausted', statusCode: 402,
+				}, { agentId: 'child-agent' });
+				const activeAfterChildError = session.hasActiveTurn;
+				mockSession.fire('assistant.message_delta', { messageId: 'parent-message', deltaContent: 'Still working' });
+				mockSession.fire('session.idle', {});
+
+				assert.deepStrictEqual({
+					activeAfterChildError,
+					errors: signals.flatMap(signal => isAction(signal, ActionType.ChatError) ? [signal.parentToolCallId] : []),
+					parentOutput: getActions(signals).flatMap(action => action.type === ActionType.ChatResponsePart && action.part.kind === ResponsePartKind.Markdown ? [action.part.content] : []),
+					completed: getActions(signals).flatMap(action => action.type === ActionType.ChatTurnComplete ? [action.turnId] : []),
+					hasActiveTurn: session.hasActiveTurn,
+				}, {
+					activeAfterChildError: true,
+					errors: mapped ? ['child-task'] : [],
+					parentOutput: ['Still working'],
+					completed: ['byok-parent'],
+					hasActiveTurn: false,
+				});
+			});
+		}
+
+		test('unmapped subagent error is logged without failing the parent turn', async () => {
 			const telemetryService = new CapturingTelemetryService();
 			const { session, mockSession, signals } = await createAgentSession(disposables, { telemetryService });
 			session.resetTurnState('turn-1');
@@ -27092,36 +27140,7 @@ Use the attached image as context.
 				serviceRequestId: 'service-request-id',
 			} as SessionEventPayload<'session.error'>['data'], { id: 'session-error-event', parentId: 'previous-event', agentId: 'sdk-agent-id' });
 
-			assert.strictEqual(signals.length, 1);
-			assert.ok(isAction(signals[0], ActionType.ChatError));
-			if (isAction(signals[0], ActionType.ChatError)) {
-				const action = signals[0].action as ChatErrorAction;
-				assert.deepStrictEqual({
-					error: action.part.error,
-					resumable: action.part.resumable,
-				}, {
-					error: {
-						errorType: 'TestError',
-						message: 'something went wrong',
-						stack: 'Error: something went wrong',
-						_meta: {
-							chatError: {
-								fetchError: {
-									type: 'failed',
-									reason: 'something went wrong',
-									requestId: 'provider-request-id',
-									serverRequestId: 'service-request-id',
-									capiError: {
-										code: 'test-code',
-										message: 'something went wrong',
-									},
-								},
-							},
-						},
-					},
-					resumable: undefined,
-				});
-			}
+			assert.deepStrictEqual({ actions: getActions(signals), hasActiveTurn: session.hasActiveTurn }, { actions: [], hasActiveTurn: true });
 			assert.deepStrictEqual(telemetryService.events.filter(event => event.eventName === 'agentHost.copilotSdkSessionError'), [{
 				eventName: 'agentHost.copilotSdkSessionError',
 				data: {