Project MCP config does not seem to work

Added this to .claude/settings.json inside the project dir:

{
  "mcpServers": {
    "puppeteer": {
      "command": "npx",
      "args": [
        "--yes",
        "--silent",
        "@modelcontextprotocol/server-puppeteer"
      ]
    }
  }
}

Yet, when I list them with claude mcp list, I get the following:

No MCP servers configured. Use claude mcp add to add a server.

Any ideas on how to make the project-scope MCPs work?

Thanks.