[BUG] Regression: MCP tool search fails in 2.1.70 (working in 2.1.69)

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?

Updating the Claude Code CLI to version 2.1.70 breaks the MCP tool search functionality. Rolling back the CLI to version 2.1.69 restores normal operation. The issue appears connected to the 2.1.70 release, which fails to handle dynamic tool loading from connected MCP servers when ENABLE_TOOL_SEARCH is active.

What Should Happen?

The agent queries connected MCP servers, dynamically loads the required tools, and executes the request, matching the behavior in 2.1.69.

Error Messages/Logs

Steps to Reproduce

1. Run Claude Code CLI on Ubuntu Linux.
2. Ensure settings.json includes "ENABLE_TOOL_SEARCH": "true" in the env block.
3. Configure and connect local MCP servers or plugins with search permissions.
4. Run version 2.1.70.
5. Submit a prompt that requires the agent to utilize the MCP tool search.

all mcp tools are already loaded on session start instead of on demand.

Claude Model

None

Is this a regression?

Yes, this worked in a previous version

Last Working Version

_No response_

Claude Code Version

2.1.69

Platform

Anthropic API

Operating System

Ubuntu/Debian Linux

Terminal/Shell

WSL (Windows Subsystem for Linux)

Additional Information

_No response_