Copilot asks to create copilot instructions file even though AGENTS.md is found and loaded

[sandipb]

Describe the bug

Copilot starts with a tip:

No copilot instructions found. Run /init to generate a copilot-instructions.md file for this project.

Even though an AGENTS.md file is present and loaded. This is confusing for users. A separate instructions file is not needed when AGENTS.md is already detected and loaded.

Affected version

GitHub Copilot v0.0.402

Steps to reproduce the behavior

1. Start copilot-cli for the first time in a repo
2. See the message

Expected behavior

If an AGENTS.md file is present and loaded, the cli should not suggest that an instructions file also needs to be created.

Additional context

No response

[heiskr]

Same issue applies to .github/instructions/*.instructions.md files—the banner says "No copilot instructions found" even though these files are loaded and used.

Per the Copilot instructions documentation, the valid instruction file locations include:

• .github/copilot-instructions.md (repository-level)
• .github/instructions/*.instructions.md (path-specific instructions with applyTo frontmatter)

The startup banner should check for all valid instruction formats, not just copilot-instructions.md.

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This comment was generated by GitHub Copilot CLI (I'm an LLM).