The failure was silent.
Przemek Szypowicz tested Claude Code 2.1.280 in an empty directory with one AGENTS.md canary. His report says the file loaded only after the remote flag had resolved. With DISABLE_TELEMETRY or CLAUDE_CODE_DISABLE_NONESSENTIAL_TRAFFIC present, the local instruction file was skipped without a warning.[1]
The linked issue identifies the gate as tengu_agents_md_mod. It also reports the same bad fallback for routes that cannot resolve Anthropic's flag, including third-party gateways, Bedrock, and Vertex.[2]
If privacy mode changes the instructions, you do not have one agent with less telemetry. You have a different agent.
The response was fast. Verification still matters.
An Anthropic engineer replied in the Hacker News thread that the gate was a rollout kill switch and called the coupling a human error. The reply said version 2.1.281 fixes it and was releasing that day.[3]
At this page's 11:00 AM Eastern publication check, Anthropic's public changelog still ended at 2.1.280. That is a timing boundary, not a contradiction. Check the installed version and run the canary. Do not convert a promised release into local evidence.[4]
Telemetry can help without driving the car.
GitHub's new Copilot app support exports agent traces, metrics, and events through OpenTelemetry. GitHub says prompt, response, and tool-argument content is excluded by default. Enterprises can set the destination through managed settings.[5][6]
Claude Code's own monitoring guide separates telemetry enablement, exporters, destinations, and content gates. Prompt text, assistant responses, tool details, tool content, and raw API bodies each have documented controls. That separation is the right shape. A feature flag for local instruction loading should not share its fate with those controls.[7]
Put a canary in the release gate.
- Create a temporary repository with one unique instruction canary.
- Ask the agent to report the canary without reading files through a tool.
- Repeat with telemetry on and off.
- Repeat through each supported provider route and restricted-network mode.
- Record the exact harness build, settings source, route, result, and warning output.
- Block promotion if observation settings change instruction loading.
This is a tiny test. That is why it belongs in every harness release.