Claude Code reads AGENTS.md only when telemetry is on

Claude Code 2.1.277 now supports AGENTS.md, but only when telemetry is turned on. In projects without a CLAUDE.md file, it should read AGENTS.md instead. However, with telemetry disabled, the file never loads. The support is built-in as a plugin called agents-md, which is disabled by default and only available when a remote feature flag called tengu_agents_md_mod is true.

If Claude Code cannot fetch this flag, the plugin is unavailable, and the local file is never read. The markers for this feature do not print any warnings, so users may not notice when a markdown file from the working directory is skipped. The issue also notes that third-party gateways like Bedrock and Vertex have the same problem because the flag cannot resolve to true there.

While CLAUDE.md supports importing from specific paths, those do not rely on the flag. With a one-line CLAUDE.md file placed next to the AGENTS.md, the same canary test shows the word even with telemetry off. Turning off telemetry was done intentionally, and it only costs diagnostics. However, it also silently costs the feature that reads a file from the local disk.

A remote flag may make sense for features interacting with a server, but this one only needs input in the working directory. The gate affects users who are likely to care about AGENTS.md, as someone maintaining a single instruction file for multiple agents usually pays attention to what each tool shares with the outside world. A privacy setting should not quietly turn off unrelated local behavior.

If Anthropic wants to roll out features gradually, the fallback for a flag that cannot be fetched should either be the documented behavior or a visible message explaining what was skipped and why. Until then, the author uses a one-line CLAUDE.md for instructions and a symlink for skills.