[BUG] Claude agent in VSCODE unable to discover skills

Preflight Checklist

• [x] I have searched existing issues and this hasn't been reported yet
• [x] This is a single bug report (please file separate reports for different bugs)
• [x] I am using the latest version of Claude Code

What's Wrong?

I'm using enterprise github copilot with the claude code agent that's recently made available on vscode. The agent has trouble discovering the .claude folder and unable to call skills when prompted. The registered skill shows zero when I asked CLAUDE what skills we have. When explicitly asked to find the .claude folder it first used glob, then used command line tools. I think it didn't find it using glob but that seems to be the default tool it uses.

What Should Happen?

Claude agent on vscode should be able to find .claude folder without explicit instructions

Error Messages/Logs

Steps to Reproduce

1. Use CLAUDE agent in vscode
2. Enable skills on VSCODE
3. Ask CLAUDE to do something that's related to the skill
4. CLAUDE does it without trying to look for CLAUDE.md and is unable to find the skill

Claude Model

Sonnet (default)

Is this a regression?

I don't know

Last Working Version

_No response_

Claude Code Version

2.1.7

Platform

Anthropic API

Operating System

Windows

Terminal/Shell

VS Code integrated terminal

Additional Information

I'm not sure if this is a bug I should submit to VSCode or Claude. I apologize in advance if it doesn't belong here.