Summary

Split out from #2523 (v2 redesign of process/transport configuration APIs). #2523's "Required changes" explicitly ask to "ensure the runtime consumes the host_start env_json contract for host-side reads so configuration remains per client rather than ambient to the host process," and notes: "the first-class configuration and env_json work may not be possible without runtime changes. If runtime changes are required, file a single follow-up issue describing the complete runtime work and treat implementation of those runtime changes as out of scope for this SDK issue."

Investigation confirms runtime-side changes are required. This issue consolidates the complete runtime work; implementing it is explicitly out of scope for #2523.

Evidence

PR #1920 (.NET E2E harness) documented and worked around this exact gap rather than fixing it at the source:

Some runtime code paths run host-side in the SDK's own process (the loaded cdylib) and read the ambient process environment rather than the environment passed to copilot_runtime_host_start:

• native fetch_copilot_user reads COPILOT_DEBUG_GITHUB_API_URL via std::env::var
• the gh-CLI auth fallback spawns gh auth token, which inherits GH_TOKEN / GITHUB_TOKEN / GH_CONFIG_DIR

Their harness fix was scoped as a workaround (mirroring select vars onto the real process env, gated to in-process sessions only) with an explicit note: "the proper long-term fix belongs in the runtime: thread the host_start environment into these host-side reads instead of consulting the global process env."

Why this matters beyond the E2E harness

For a single in-process client per host process, ambient-env reads happen to resolve correctly today because the one client's env and the process's env coincide. But the SDKs' in-process (FFI) transport is explicitly designed to let one host process load the runtime and serve multiple independently-configured clients (see #1976, which added Go/Python/Rust in-process parity and the shared InProcessConnection boundary). Any host-side runtime code path that consults the ambient process environment instead of the per-client env_json passed to host_start cannot be configured per-client — the second client to start will silently observe the first client's (or the host process's own) values for these specific paths, or vice versa. This is a real correctness gap for any embedder hosting more than one client, not just a harness quirk.

Required runtime work

1. Audit all host-side (native, in-process-loaded) code paths in copilot-agent-runtime for reads of the raw process environment (std::env::var/equivalent) for values that are supposed to be per-client/per-host_start-call configuration. Known instances from Honor inprocess transport in C# E2E harness and fix in-process auth #1920:
   • fetch_copilot_user's use of COPILOT_DEBUG_GITHUB_API_URL
   • the gh auth token fallback's inheritance of GH_TOKEN / GITHUB_TOKEN / GH_CONFIG_DIR (spawned subprocess inherits ambient env rather than being given an explicit env derived from the host_start env_json)
2. Thread the env_json supplied to copilot_runtime_host_start through to these paths so they resolve per-client configuration instead of ambient host-process state, consistent with the env_json contract's intent as already implemented for other in-process configuration (log level, idle timeout, remote/auth token, base directory, keytar-disable — see Add in-process (FFI) transport to the Go SDK #1976, Solution (#1934): [Tracking] In-process (FFI) items to be cleaned up #1993).
3. Add or extend runtime-side (or cross-SDK E2E) test coverage that starts two in-process clients with different auth/config in the same host process and asserts neither observes the other's (or the ambient process's) values for the affected paths — this is the scenario that would have caught the original gap without needing a harness-only workaround.
4. Once fixed, evaluate whether the .NET E2E harness workaround from Honor inprocess transport in C# E2E harness and fix in-process auth #1920 (mirroring select env vars onto the real process environment via setenv, gated to in-process sessions) can be simplified or removed, since the underlying runtime gap it compensates for will no longer exist.

Out of scope for this issue

• SDK-side public API changes (client-wide vs. transport-scoped option placement, "out of process" naming, validation) — these are handled in [v2] Redesign process and transport configuration APIs #2523 directly and do not require runtime changes.
• Runtime artifact acquisition/embedding (owned by [v2] Consolidate runtime discovery, acquisition, and embedding #2524) and lifecycle/SQLite work (owned by [v2] Complete in-process lifecycle and platform reliability work #2525).

References

• [v2] Redesign process and transport configuration APIs #2523 (parent, requires this follow-up)
• Honor inprocess transport in C# E2E harness and fix in-process auth #1920 (original discovery + harness-only workaround)
• Add in-process (FFI) transport to the Go SDK #1976 (in-process transport parity across Go/Python/Rust, establishes multi-client-capable in-process hosting as an explicit design goal)
• Solution (#1934): [Tracking] In-process (FFI) items to be cleaned up #1993