fix: skip remote URIs when resolving MCP server cwd

core/context/mcp/MCPConnection.ts

@@ -1,5 +1,6 @@
 import { Client } from "@modelcontextprotocol/sdk/client/index.js";
 import { Transport } from "@modelcontextprotocol/sdk/shared/transport.js";
+import { homedir } from "os";
 import { fileURLToPath } from "url";
 
 import {
@@ -476,6 +477,13 @@ Org-level secrets can only be used for MCP by Background Agents (https://docs.co
         if (resolved.startsWith("file://")) {
           return fileURLToPath(resolved);
         }
+        // Remote URIs (e.g. vscode-remote://ssh-remote+host/path) cannot be
+        // used as a local cwd for child_process.spawn(). When the extension
+        // runs in the Local Extension Host on Windows while connected to a
+        // remote workspace, fall back to the user's home directory.
+        if (resolved.includes("://")) {
+          return homedir();
+        }
         return resolved;
       }
       return resolved;

core/context/mcp/MCPConnection.vitest.ts

@@ -175,6 +175,17 @@ describe("MCPConnection", () => {
       );
       expect(mockResolve).toHaveBeenCalledWith("src", ide);
     });
+
+    it("should fall back to homedir for remote URIs that cannot be used as local cwd", async () => {
+      const ide = {} as any;
+      vi.spyOn(ideUtils, "resolveRelativePathInDir").mockResolvedValue(
+        "vscode-remote://ssh-remote+192.168.137.2/home/user/project",
+      );
+      const conn = new MCPConnection(baseOptions, { ide });
+
+      const { homedir } = require("os");
+      await expect((conn as any).resolveCwd("src")).resolves.toBe(homedir());
+    });
   });
 
   describe("connectClient", () => {