VS Code 1.140 Adds Multi-Folder Agent Sessions, Remote Delegation Tools and Symlinked Dependencies for Git Worktrees

Overview

Visual Studio Code 1.140 was released on September 30, 2026, according to the project’s release notes. The notes say the update “expands agent workflows, improves worktree reuse, and adds enterprise AI controls.” The release is tagged 1.140.0 on GitHub, where it was published on September 30 at 22:00 UTC.

The changes continue VS Code’s shift toward agent-centric workflows that The Machine Herald has previously covered in the 1.123 release.

What Is New

Copilot harness and the agent host

Per the release notes, “The Copilot harness adds exciting new agent functionality to VS Code while keeping the way you work familiar.” The same page states that “The harness runs in a dedicated agent host process based on the Agent Host Protocol (AHP).”

The agent host was introduced in an August 26 VS Code blog post by Rob Lourens, Connor Peet and Brigit Murtaugh. The post describes the Agent Host as “a self-contained process that owns agent sessions” and refers to “the open Agent Host Protocol (AHP) for connecting hosts and clients.”

HydraFusion model orchestration

According to the release notes, “HydraFusion is an adaptive model orchestration system that chooses the models and workflow for each coding task.” The notes describe three possible paths: solving a task with one model, escalating to a stronger model, or having another model critique and revise the result. The stated aim is to improve result quality while balancing speed and cost.

Multi-folder sessions and remote delegation

The release notes say that “Multi-folder sessions let you coordinate related work across repositories or isolated worktrees in one session.” Each chat can use its own folder or worktree, the notes say, without changes leaking between chats.

For remote work, the release notes list four built-in tools: list_agent_hosts, create_remote_session, get_remote_session and send_remote_message. The first is described as the way to “Discover hosts, models, resource capacities, and session load.” The notes present the tools as letting an agent delegate work to connected remote hosts without the user selecting a host in a picker for each task.

Worktree symlinks

On the source control side, the notes say users can “Configure git.worktreeSymlinkFolders with .gitignore-style patterns for ignored folders, such as node_modules.” According to the release notes, the setting is intended to avoid reinstalling dependencies or duplicating large build artifacts in each Git worktree.

Chat, MCP and enterprise controls

The release notes also describe an experimental chat.experimental.persistentProgress setting that keeps a progress indicator visible until a long-running agent response finishes. For MCP servers, users adding a workspace server can choose .mcp.json to save it at the workspace root.

For administrators, the notes state that “Administrators can set the default tier for the Auto model with the autoTier managed setting,” with values efficiency, balance or intelligence. A github.copilot.chat.otel.captureIdentity setting enables capturing user identity in OpenTelemetry data. Version requirements are now explained wherever AI features are unavailable, rather than only through an update dialog.

What We Don’t Know

All details above come from Microsoft’s own release notes and blog; no independent coverage or benchmarks of HydraFusion were available at the time of writing, so claims about result quality, speed and cost are the project’s stated goals rather than measured outcomes. The release notes reviewed do not state which models HydraFusion selects between, nor whether it is generally available to all Copilot plans.

Analysis

The combination of multi-folder sessions and the worktree symlink setting addresses a practical cost of running several agents in parallel: each isolated worktree normally needs its own copy of ignored directories such as node_modules. Whether the symlink approach works cleanly across package managers is not addressed in the notes.