Claude Code Fails to Load AGENTS.md When Telemetry Is Disabled, With Workaround

Problem Symptoms and Cause

The AGENTS.md support feature introduced in Claude Code 2.1.277 was confirmed not to work properly when telemetry is disabled. This is because the availability of the built-in plugin depends on a remote feature flag (tengu_agents_md_mod). If the flag cannot be retrieved, it defaults to false, and no attempt is made to read local files. When the environment variables DISABLE_TELEMETRY=1 or CLAUDE_CODE_DISABLE_NONESSENTIAL_TRAFFIC=1 are set, the same issue occurs on other platforms such as Bedrock and Vertex, with project instructions being ignored without any warning.

Verification and Impact

The author reproduced this issue through tests including canary words. Most users waste time debugging prompts, mistakenly assuming the model ignored instructions, unaware that the file was not loaded. Users who disable telemetry for privacy protection and multi-agent managers are particularly affected. While Anthropic used remote flags for staged rollout, criticism has arisen that the design, where local file reading depends on network status, is inappropriate.

Workarounds and Recommendations

The most reliable workaround currently is to create CLAUDE.md and import @AGENTS.md. This method does not rely on remote flags and works normally even when telemetry is disabled. However, it requires the hassle of recreating the additional file (CLAUDE.md) that was intended to be removed with AGENTS.md support. Additionally, unlike Codex, Claude Code does not natively support user-level AGENTS.md or shared skills (.agents/skills), so manual synchronization using symlinks or the /import command is required.