[BUG] tools/call never dispatched to stdio MCP servers in Claude Desktop 1.7196.0 (UtilityProcess Check regression)

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?

Since updating to Claude Desktop 1.7196.0 (released 2026-05-12), stdio MCP servers no longer receive tools/call messages. Every tool call times out after 4 minutes. The main log shows a new check that did not exist in the previous version: "UtilityProcess Check: Extension powerbi-modeling-mcp not found in installed extensions". After this check fails, tool calls are never dispatched to the MCP server.

What Should Happen?

stdio MCP servers configured in claude_desktop_config.json should receive tools/call messages regardless of whether they are registered as marketplace extensions, as they did in previous versions.

Error Messages/Logs

UtilityProcess Check: Extension powerbi-modeling-mcp not found in installed extensions

Steps to Reproduce

1. Configure any stdio MCP server in claude_desktop_config.json
2. Start Claude Desktop 1.7196.0
3. Open a conversation and ask Claude to use a tool from the MCP server
4. Observe that the tool call times out after 4 minutes
5. Check the main log — tools/call is never sent to the MCP server

Claude Model

None

Is this a regression?

Yes, this worked in a previous version

Last Working Version

version before 2026-05-12

Claude Code Version

N/A

Platform

Anthropic API

Operating System

Windows

Terminal/Shell

Other

Additional Information

_No response_