Does this issue occur when all extensions are disabled?: Yes/No
- VS Code Version: vscode insiders 1.120.0
- OS Version: Version 25H2
vscode insiders 1.120.0 is prioritizing the Github Copilot CLI plugin hooks over the hooks shipped via vscode insiders extension in .agents folder. thus users who have copilot cli azure plugin installed are seeing hook errors like this in vscode insiders. The screenshot is an example from Azure plugin hooks in Copilot CLI being prioritized over vscode extension (Github Copilot for Azure) hooks.

Steps to Reproduce:
- Install Azure plugin (https://github.com/microsoft/azure-skills) in Github Copilot CLI
- Try to run this prompt or anything related to azure that can invoke skills. Example - Build URL shortner app and deploy to azure. notice all the post tool use hook warnings in chat.
Couple of questions:
- is it by design that local plugins are enabled by default?
- Is there a plan to support copilot/claude hooks in vscode if users have plugins with hooks?
Does this issue occur when all extensions are disabled?: Yes/No
vscode insiders 1.120.0 is prioritizing the Github Copilot CLI plugin hooks over the hooks shipped via vscode insiders extension in .agents folder. thus users who have copilot cli azure plugin installed are seeing hook errors like this in vscode insiders. The screenshot is an example from Azure plugin hooks in Copilot CLI being prioritized over vscode extension (Github Copilot for Azure) hooks.
Steps to Reproduce:
Couple of questions: