Workspace MCP servers should take precedence over plugins

[heaths]

Describe the bug

I'm developing an MCP server that I also have installed as a plugin. Copilot CLI uses /.mcp.json in a repo root - which I can tell from renaming the MCP server - but if it retains the same name, the plugin is what shows up with /mcp. Seems the repository should always take precedence, shouldn't it? Skills do, as is evident from /skills - project skills with the same name show "(project)" instead of "(plugin)". This is inconsistent behavior with MCP servers.

Affected version

0.0.422-0

Steps to reproduce the behavior

1. Install a plugin with an MCP server.
2. Add a .mcp.json file to your repo root with the same name and configuration as that MCP server.
3. Start copilot and run /mcp.

Expected behavior

Should show something like,

Workspace:
> ✓ example-mcp   Description of MCP server

Instead, shows it from a plugin:

Plugins:
> ✓ example-mcp   Description of MCP server

Additional context

• macOS 26.3
• Ghostty 1.2.3
• bash 5.3.9(1)-release (aarch64-apple-darwin25.1.0)