Project-scoped MCP servers stop resolving from parent directory mid-session

Bug Description

MCP servers registered to a parent directory path stop resolving when Claude Code runs from a child directory. The servers work at session start, then silently stop being available mid-session. New sessions started from the same child directory also fail to resolve them.

Environment

• Claude Code version: 2.1.86
• Install method: native (macOS)
• Auto-updates: OFF
• macOS Darwin 24.6.0, Apple Silicon (M1 Max)

Reproduction

1. Register MCP servers at a parent directory scope:

``
claude mcp add -s local gemini-cli -- npx -y gemini-mcp-tool
claude mcp add -s local codex -- codex mcp-server
claude mcp add -s local gitnexus -- npx gitnexus mcp
`
These are registered while CWD is ~/wibuz_sourcec_code`

1. Start Claude Code from a child directory:

``
cd ~/wibuz_sourcec_code/laravel-api
claude
``

1. Servers resolve correctly at session start. ToolSearch finds them. MCP tools work.

1. After extended usage (several hours, many tool calls), servers stop being available. ToolSearch returns "No matching deferred tools found" for the same tools that worked earlier.

1. Starting a NEW Claude Code session from the same child directory also fails to find the servers.

What We Found

• ~/.claude.json contains the servers under projects["/Users/mackmother/wibuz_sourcec_code"].mcpServers — 6 servers registered
• There is NO entry for the child path projects["/Users/mackmother/wibuz_sourcec_code/laravel-api"]
• The servers were NOT deleted or overwritten — they're still in the config file
• No external process wrote to ~/.claude.json (verified via forensics — nia installer explicitly skips CLI-based IDEs)
• Parent path resolution simply stopped working

Expected Behavior

Servers registered to ~/wibuz_sourcec_code should always resolve when Claude Code runs from ~/wibuz_sourcec_code/laravel-api. The parent scope should persist across sessions.

Workaround

Moved all server configs to .mcp.json in the child directory (git-tracked). This bypasses the project-scoped resolution entirely.

Impact

This caused 6 MCP servers (gemini-cli, codex, gitnexus, qmd, chrome-dev-1/2/3) to silently disappear mid-session. On a project that relies on multi-model council collaboration, this broke the entire engineering workflow. Previously caused a 48-hour fake council incident (S661) when similar MCP config loss went undetected.