Claude Code stopped reading local AGENTS.md files when telemetry was off, and Anthropic shipped the fix the same day
Przemysław Szypowicz found that Claude Code 2.1.277 to 2.1.280 skipped local AGENTS.md files when telemetry was disabled, because the feature was gated behind a remote flag; an Anthropic engineer confirmed it as a rollout mistake and released 2.1.281 with a fix the same day.
Why it mattersA privacy setting was silently turning off a feature that reads a file from disk, so agents that depend on AGENTS.md were running with no rules and giving no warning, which changes what every team on those versions should check today.
A privacy switch was silently turning off a feature that reads a local file from disk. Przemysław Szypowicz reported on 23 September 2026 that Claude Code versions 2.1.277 through 2.1.280 skipped local AGENTS.md files entirely when telemetry was off, and gave no warning that they had.
Szypowicz set up a plain test: a directory with an AGENTS.md file containing the word PERIWINKLE, and a claude -p query asking for that word. With telemetry on, the model saw the file and returned the word. With DISABLE_TELEMETRY=1 or CLAUDE_CODE_DISABLE_NONESSENTIAL_TRAFFIC=1 set, the file was never read. Setting either variable to 0 did not put the behaviour back.
Why blocking telemetry blocked a local file read
Szypowicz traced the cause to a remote feature flag named tengu_agents_md_mod, which defaults to false. The AGENTS.md loader is a plugin gated on that flag, so if the flag fetch is blocked, the plugin is treated as disabled. Blocking telemetry blocks the fetch. The file itself lives on the same machine as the agent and needs no network access to open, so a user who switched off tracking to reduce network calls also switched off a feature that reads local disk.
The workaround Szypowicz posted is one line: create a CLAUDE.md file next to the AGENTS.md and put @AGENTS.md inside it. CLAUDE.md is read unconditionally, and the @ reference loads the AGENTS.md content.
An Anthropic engineer replied and shipped a fix the same day
An Anthropic engineer posting under the name mpoteat replied on Hacker News within the day and confirmed the account. Quoted directly: "It's already been fixed as part of v2.1.281 releasing today." The same reply called the gating "a rollout artifact" and "fully human error", and explained that the feature was shipped through an internal plugin system called Mods, where flags exist so the team can turn a feature off remotely if it misbehaves.
For a team on the affected versions, what to do is short. Update to 2.1.281 to stop the skip. Until you are there, drop the CLAUDE.md workaround into any repository that keeps its coding rules in AGENTS.md, so an agent running with telemetry off does not run with no rules. Anyone who has been on 2.1.277 through 2.1.280 with telemetry off for the past week should assume the model has not seen a project's AGENTS.md at all, and reread the last week of pull requests with that in mind.
The larger point Szypowicz raises has no version fix. A remote feature flag means Anthropic can change what a tool installed on your machine does, without shipping a new version and without your knowledge. Anthropic's Mods system makes that pattern the default for new Claude Code features, so it is worth asking of any coding agent you install which parts of it need a network call to work correctly on files you already have.
Source
Przemysław Szypowicz, Claude Code reads AGENTS.md only when telemetry is on, 23 September 2026. Anthropic engineer reply on Hacker News thread 49814947.
This item was written by an AI system from the linked source. Reveneau is responsible for what it publishes.
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