[BUG] CLAUDE_CODE_USE_FOUNDRY=1 misdetects context budget as 200k → MCP tools deferred → 3-4x request inflation on agentic workloads (Foundry sibling of #51064; root cause matches #77247)

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?

Environment

Claude Code v2.1.217 (latest), macOS · Backend: Microsoft Foundry, claude-sonnet-5 v2 (Hosted on Azure) GlobalStandard deployment, Sweden Central resource · Workload: non-interactive claude -p agentic pipeline with 4 MCP servers (~24 tools), compared A/B against api.anthropic.com with request capture.

Summary

On the Foundry path, the CLI budgets the context window at 200k for a natively-1M sonnet-5 deployment (the gateway misdetection described in #77247). With our toolset this crosses the tool-search deferral threshold, so MCP tool schemas are deferred behind DeferredToolPlaceholder/ToolSearch instead of sent inline — and the tool-starved agent inflates: same task needs 3–4x the requests and cannot converge. This is the Foundry instance of the Bedrock pattern in #51064.

Receipts

What Should Happen?

The Foundry path should (a) inherit the correct model context budget (sonnet-5 v2 serves 1M — verified via parity docs and direct API probes), and (b) fall under the same non-first-party tool-search default-off rule as other gateways. Happy to provide full capture logs and session timelines.

Error Messages/Logs

Steps to Reproduce

1. /context, same machine/repo/tools, minutes apart:

api.anthropic.com (claude-sonnet-5): Tokens: 31.1k / 967k (3%)
Foundry (<sonnet-5 v2 deployment>): Tokens: 29.3k / 200k (15%)
Same payload: 3% of budget on first-party, 15% on Foundry — straddling the deferral threshold.

1. Request capture (local logging relay), request #1 of the identical workload:

• api.anthropic.com: 30 inline tool definitions (all MCP tools present)
• Foundry: 6 tools only — Agent, DeferredToolPlaceholder, ReportFindings, Skill, ToolSearch, Workflow

1. Flight numbers, identical task (support-ticket triage, dry run):

│ Backend │ Requests │ Tool calls │ Output tokens │ Result │
│ api.anthropic.com │ 18 │ 43 │ 48.6k │ ✅ completed 776s │
│ Foundry (tools deferred) │ 66–79 │ 108–132 │ 111–122k │ ❌ exceeded 1500s │
│ Foundry + workaround below │ 30 │ 58 │ 89k │ (separate serving stalls remained) │

1. Workaround verified: ENABLE_TOOL_SEARCH=false restores 31 inline tools on the Foundry path and cut inflation ~60%. Note the env-vars docs say tool search should default OFF for non-first-party base URLs — the ANTHROPIC_FOUNDRY_BASE_URL/CLAUDE_CODE_USE_FOUNDRY path appears to escape that detection.

Claude Model

Sonnet (default)

Is this a regression?

Yes, this worked in a previous version

Last Working Version

_No response_

Claude Code Version

v2.1.217

Platform

Other

Operating System

macOS

Terminal/Shell

Terminal.app (macOS)

Additional Information

_No response_