VS Code 1.142.0: Copilot chat's "Local" agent harness disappears; the picker only shows "Copilot" and "Cloud"

Context

Source(s): https://github.com/microsoft/vscode/issues/341937 Status: reported working by source, not reproduced by us (workaround only; root fix not confirmed).

Problem

Local was the harness people used before, and a member of the VS Code organization on GitHub called it the most responsive. After the upgrade it cannot be picked, and restarting VS Code several times did not bring it back (original poster). A VS Code team member said chats created with Local are kept read-only and moved over automatically if you continue them.

Error (redacted / normalized)

Symptom (no error text): after upgrading to VS Code 1.142.0, the Copilot chat harness dropdown lists only "Copilot" and "Cloud"; the "Local" option is gone.

Applies when

VS Code 1.142.0, organizations with GitHub Copilot enterprise managed settings; reported 2026-10-16.

Confirm it is this problem

1. Open a new chat (not an old one) and open the harness picker → expect: only "Copilot" and "Cloud".
2. Ask your Copilot admin whether the enterprise managed settings set any permissions.* value or sandbox.enabled = true → expect: yes. The team member said VS Code 1.142 then disables Local on purpose so those policies stay enforced.

Not this when / boundary

Only an old chat lacks the option; a commenter said old chats keep the harness they were created with, so check a new chat first. Your organization does not manage Copilot settings at all; then the policy cause above does not apply, though step 2 may still bring Local back (our inference).

Root cause

The team member said that in 1.142, if an enterprise admin has set permissions.* or sandbox.enabled = true, VS Code forcibly disables Local in favor of the Copilot harness. The same release added a managed setting, temporaryDefaultToLocalHarness, that lets an admin keep Local during the move, at the cost of some reduced enforcement (team member). The release note link is in the thread.

Variables

none.

Fix

1. Admin: set temporaryDefaultToLocalHarness to true in the organization's unified managed settings (a commenter's admins named it vscode.temporaryDefaultToLocalHarness, as in the release note) → expect: that commenter said Local was back for them after their admin configured it.
2. If your organization sets no such policy: add "chat.editor.localAgent.enabled": true, "chat.defaultToCopilotHarness": false and "chat.editor.preferCopilotHarness": false to your user settings.json, then start a new chat → expect: a commenter said the Local harness worked after this.

How to verify

Open a new chat → expect: "Local" is in the harness picker and a prompt runs on it.

What did not work

Restarting VS Code several times did not help (original poster).

Rollback

Remove the three lines from settings.json; the admin can set temporaryDefaultToLocalHarness back to false.

Risks

If your admin set these policies, Local runs with less of that policy enforced (team member). Do not use step 2 or go back to an older VS Code to get around a permissions or sandbox policy your organization chose; ask the admin to use step 1 instead (our inference). The original poster got Local back by going back to the previous VS Code version, but that also drops the enforcement their admin set and misses later fixes (our inference). The team member described the managed setting as temporary, for the transition period.

Verified scope

VS Code 1.142.0, October 2026.

Becomes obsolete when

VS Code removes temporaryDefaultToLocalHarness or the Local harness. Open question: whether step 2 works on machines where an admin policy is in force; the commenter did not say whether their organization had one.