Claude Code supports AGENTS.md but feature is silently disabled when telemetry is off

However, technical reports and GitHub issue #95690 indicate that the AGENTS.md loading mechanism is implemented as a plugin gated by a remote Anthropic feature flag. This means the feature is silently disabled if users have turned off telemetry or non-essential traffic via environment variables such as CLAUDE_CODE_DISABLE_NONESSENTIAL_TRAFFIC=1 or DISABLE_TELEMETRY=1. Additionally, users accessing Claude Code through third-party gateways like Bedrock or Vertex face the same issue because the required remote flag cannot be resolved.

Critically, the tool does not provide a warning or error message when the AGENTS.md file is skipped. This silence can lead users to incorrectly conclude that the model is ignoring their instructions when, in fact, the local file was never loaded into the session. Currently, a workaround involves using a single-line CLAUDE.md file that contains an @AGENTS.md import, which functions correctly even with telemetry disabled.

PLUS ULTRAby Amenoyomi

The loading of AGENTS.md is managed by a built-in plugin called agents-md. This plugin is not active by default; it requires a server-side switch known as the tengu_agents_md_mod remote feature flag to be enabled for the file to be read.

Because the plugin depends on this remote flag, any configuration that blocks non-essential traffic—such as setting DISABLE_TELEMETRY=1 or CLAUDE_CODE_DISABLE_NONESSENTIAL_TRAFFIC=1—prevents the flag from being fetched. This also occurs when using third-party gateways like Amazon Bedrock or Google Vertex, where the flag cannot resolve to true, effectively locking the local file reading behind a network requirement.

Since Claude Code provides no warning or error message when this process fails, users are left unaware that their project instructions were skipped. This silent failure creates a risk where users misinterpret the lack of response as the model ignoring instructions or lacking capability, potentially leading them to waste time on unnecessary prompt adjustments.