MCP server 'blocked by policy'

[mydeveloperplanet]

Describe the bug

We have a custom MCP registry which is checked when local MCP servers are configured. Although the local MCP configuration is correct and works just fine within VSCode and IntelliJ plugin, an error message 'MCP server is blocked by policy' is shown.

It is unclear what causes this. The process log mentions the following:

2026-06-25T11:40:36.761Z [ERROR] MCP server "io.github.sooperset/mcp-atlassian" filtered: Server "io.github.sooperset/mcp-atlassian" found in registry <REDACTED> but local configuration does not match the registered server identity

Affected version

GitHub Copilot CLI 1.0.65

Steps to reproduce the behavior

1. Configure an MCP server in the mcp-config.json in the ~/.copilot directory or just install it from within the Copilot CLI with /mcp add
2. The MCP server is blocked

Expected behavior

No response

Additional context

No response