fix: apply configured model settings in the v2 core

src/settings.ts

@@ -50,6 +50,7 @@ export class SettingsManager {
   private cwd: string;
   private effective: Settings = {};
   private managedDeniedModels: string[] = [];
+  private managedModelSettings: Pick<Settings, "availableModels" | "modelOverrides"> = {};
   private managedApiKeyHelper?: string;
   private watchers: fs.FSWatcher[] = [];
   private onChange?: () => void;
@@ -112,6 +113,15 @@ export class SettingsManager {
       this.managedDeniedModels = resolved.sources
         .filter((entry) => entry.source === "managed")
         .flatMap((entry) => entry.settings.deniedModels ?? []);
+      this.managedModelSettings = Object.assign(
+        {},
+        ...resolved.sources
+          .filter((entry) => entry.source === "managed")
+          .map((entry) => ({
+            availableModels: entry.settings.availableModels,
+            modelOverrides: entry.settings.modelOverrides,
+          })),
+      );
       this.managedApiKeyHelper =
         resolved.provenance.apiKeyHelper?.source === "managed"
           ? resolved.effective.apiKeyHelper
@@ -120,6 +130,7 @@ export class SettingsManager {
       this.logger.error("Failed to resolve settings:", error);
       this.effective = {};
       this.managedDeniedModels = [];
+      this.managedModelSettings = {};
       this.managedApiKeyHelper = undefined;
     }
   }
@@ -193,6 +204,28 @@ export class SettingsManager {
     );
   }
 
+  /** Model selection settings including the inline SDK settings tier. */
+  getModelSelectionSettings(
+    override?: Settings,
+  ): Pick<Settings, "availableModels" | "modelOverrides"> {
+    // The SDK unions non-managed allowlists, but a managed list owns the
+    // whole allowlist. Keep that policy when adding
+    // models the SDK did not include in its initialization result.
+    const lists = [this.effective.availableModels, override?.availableModels].filter(
+      (list): list is string[] => Array.isArray(list),
+    );
+    const managed = this.managedModelSettings;
+    return {
+      availableModels:
+        managed.availableModels ?? (lists.length > 0 ? [...new Set(lists.flat())] : undefined),
+      modelOverrides: {
+        ...this.effective.modelOverrides,
+        ...override?.modelOverrides,
+        ...managed.modelOverrides,
+      },
+    };
+  }
+
   /**
    * `deniedModels` entries from the managed tier, the only tier the CLI
    * honors them from.

src/tests/model-selection-settings.test.ts

@@ -0,0 +1,92 @@
+import { describe, it, expect, afterEach, vi } from "vitest";
+import { resolveSettings } from "@anthropic-ai/claude-agent-sdk";
+import { SettingsManager } from "../settings.js";
+
+vi.mock("@anthropic-ai/claude-agent-sdk", async (importOriginal) => ({
+  ...(await importOriginal<typeof import("@anthropic-ai/claude-agent-sdk")>()),
+  resolveSettings: vi.fn(),
+}));
+
+describe("model selection settings policy", () => {
+  let manager: SettingsManager;
+  afterEach(() => manager?.dispose());
+
+  it.each([{ availableModels: ["claude-haiku-4-5"] }, { availableModels: [] }])(
+    "keeps the managed allowlist %j and mappings above inline settings",
+    async ({ availableModels }) => {
+      const managed = {
+        availableModels,
+        modelOverrides: { "claude-haiku-4-5": "managed-haiku" },
+        deniedModels: ["claude-opus-5"],
+      };
+      vi.mocked(resolveSettings).mockResolvedValue({
+        effective: managed,
+        provenance: {},
+        sources: [{ source: "managed", settings: managed }],
+      });
+      manager = new SettingsManager(process.cwd());
+      await manager.initialize();
+      expect(
+        manager.getModelSelectionSettings({
+          availableModels: ["claude-opus-5"],
+          modelOverrides: { "claude-haiku-4-5": "inline-haiku" },
+        }),
+      ).toEqual({
+        availableModels: managed.availableModels,
+        modelOverrides: managed.modelOverrides,
+      });
+      expect(manager.getManagedDeniedModels()).toEqual(managed.deniedModels);
+    },
+  );
+
+  it("keeps managed override keys above inline keys without discarding other inline mappings", async () => {
+    const managed = { modelOverrides: { "claude-haiku-4-5": "managed-haiku" } };
+    vi.mocked(resolveSettings).mockResolvedValue({
+      effective: managed,
+      provenance: {},
+      sources: [{ source: "managed", settings: managed }],
+    });
+    manager = new SettingsManager(process.cwd());
+    await manager.initialize();
+    expect(
+      manager.getModelSelectionSettings({
+        availableModels: ["claude-haiku-4-5", "claude-sonnet-4-6"],
+        modelOverrides: {
+          "claude-haiku-4-5": "inline-haiku",
+          "claude-sonnet-4-6": "inline-sonnet",
+        },
+      }),
+    ).toEqual({
+      availableModels: ["claude-haiku-4-5", "claude-sonnet-4-6"],
+      modelOverrides: { "claude-haiku-4-5": "managed-haiku", "claude-sonnet-4-6": "inline-sonnet" },
+    });
+  });
+
+  it("preserves file and inline mappings when the managed allowlist supplies no mappings", async () => {
+    vi.mocked(resolveSettings).mockResolvedValue({
+      effective: {
+        availableModels: ["claude-haiku-4-5"],
+        modelOverrides: { "claude-haiku-4-5": "file-haiku" },
+      },
+      provenance: {},
+      sources: [
+        { source: "user", settings: { modelOverrides: { "claude-haiku-4-5": "file-haiku" } } },
+        { source: "managed", settings: { availableModels: ["claude-haiku-4-5"] } },
+      ],
+    });
+    manager = new SettingsManager(process.cwd());
+    await manager.initialize();
+    expect(manager.getModelSelectionSettings()).toEqual({
+      availableModels: ["claude-haiku-4-5"],
+      modelOverrides: { "claude-haiku-4-5": "file-haiku" },
+    });
+    expect(
+      manager.getModelSelectionSettings({
+        modelOverrides: { "claude-haiku-4-5": "inline-haiku" },
+      }),
+    ).toEqual({
+      availableModels: ["claude-haiku-4-5"],
+      modelOverrides: { "claude-haiku-4-5": "inline-haiku" },
+    });
+  });
+});

src/tests/v1/acp-agent-settings.test.ts

@@ -921,6 +921,136 @@ describe("ClaudeAcpAgent settings", () => {
       return { setModelSpy };
     }
 
+    it.each(["environment", "caller object", "caller file"])(
+      "includes configured models omitted by the SDK from %s settings",
+      async (source) => {
+        const configured = {
+          availableModels: ["claude-haiku-4-5", "claude-haiku-5-5"],
+          modelOverrides: {
+            "claude-haiku-4-5": "global.anthropic.claude-haiku-4-5-20251001-v1:0",
+            "claude-haiku-5-5": "global.anthropic.claude-haiku-5-5",
+          },
+        };
+        let settings: object | string | undefined;
+        if (source === "environment") {
+          vi.stubEnv("CLAUDE_MODEL_CONFIG", JSON.stringify(configured));
+        } else if (source === "caller file") {
+          settings = "caller-settings.json";
+          await fs.promises.writeFile(path.join(tempDir, settings), JSON.stringify(configured));
+        } else {
+          settings = configured;
+        }
+        const { setModelSpy } = mockQueryWithModels([
+          { value: "default", displayName: "Default", description: "" },
+          { value: "sonnet", displayName: "Sonnet", description: "" },
+        ]);
+        const { ClaudeAcpAgent } = await import("../../v1/acp-agent.js");
+        const agent = new ClaudeAcpAgent(createMockClient());
+        try {
+          const response = await (agent as any).createSession({
+            cwd: tempDir,
+            mcpServers: [],
+            _meta: { claudeCode: { options: { settings } } },
+          });
+          expect(querySpy.mock.calls[0][0].options.settings).toEqual(configured);
+          const ids = ["default", ...Object.values(configured.modelOverrides)];
+          expect(
+            agent.sessions[response.sessionId].models.availableModels.map(
+              (model: any) => model.modelId,
+            ),
+          ).toEqual(ids);
+          const modelOption = response.configOptions.find((option: any) => option.id === "model");
+          expect(modelOption.options.map((option: any) => option.value)).toEqual(ids);
+          await agent.setSessionConfigOption({
+            sessionId: response.sessionId,
+            configId: "model",
+            value: ids[2],
+          });
+          expect(setModelSpy).toHaveBeenLastCalledWith(ids[2]);
+          expect(agent.sessions[response.sessionId].modelInfos.map((model) => model.value)).toEqual(
+            ids,
+          );
+        } finally {
+          await agent.dispose();
+          vi.unstubAllEnvs();
+        }
+      },
+    );
+
+    it("merges file settings with caller settings after caller keys replace the env config", async () => {
+      await fs.promises.writeFile(
+        path.join(tempDir, "settings.json"),
+        JSON.stringify({
+          availableModels: ["claude-sonnet-4-6", "claude-haiku-4-5"],
+          modelOverrides: {
+            "claude-sonnet-4-6": "file-sonnet",
+            "claude-haiku-4-5": "file-haiku",
+          },
+        }),
+      );
+      vi.stubEnv(
+        "CLAUDE_MODEL_CONFIG",
+        JSON.stringify({
+          availableModels: ["claude-opus-4-6"],
+          modelOverrides: { "claude-sonnet-4-6": "env-sonnet", "claude-haiku-4-5": "env-haiku" },
+        }),
+      );
+      mockQueryWithModels([{ value: "default", displayName: "Default", description: "" }]);
+      const { ClaudeAcpAgent } = await import("../../v1/acp-agent.js");
+      const agent = new ClaudeAcpAgent(createMockClient());
+      const settings = {
+        availableModels: ["claude-haiku-4-5", "claude-haiku-5-5"],
+        modelOverrides: { "claude-haiku-4-5": "caller-haiku" },
+      };
+      try {
+        const response = await (agent as any).createSession({
+          cwd: tempDir,
+          mcpServers: [],
+          _meta: { claudeCode: { options: { settings } } },
+        });
+        expect(querySpy.mock.calls[0][0].options.settings).toEqual(settings);
+        const modelOption = response.configOptions.find((option: any) => option.id === "model");
+        expect(modelOption.options.map((option: any) => option.value)).toEqual([
+          "default",
+          "file-sonnet",
+          "caller-haiku",
+          "claude-haiku-5-5",
+        ]);
+      } finally {
+        await agent.dispose();
+        vi.unstubAllEnvs();
+      }
+    });
+
+    it.each([[], undefined])(
+      "preserves empty and absent configured allowlists: %j",
+      async (availableModels) => {
+        vi.stubEnv(
+          "CLAUDE_MODEL_CONFIG",
+          JSON.stringify({
+            availableModels,
+            modelOverrides: { "claude-haiku-4-5": "provider-haiku" },
+          }),
+        );
+        mockQueryWithModels([
+          { value: "default", displayName: "Default", description: "" },
+          { value: "sonnet", displayName: "Sonnet", description: "" },
+        ]);
+        const { ClaudeAcpAgent } = await import("../../v1/acp-agent.js");
+        const agent = new ClaudeAcpAgent(createMockClient());
+        try {
+          const response = await (agent as any).createSession({ cwd: tempDir, mcpServers: [] });
+          const modelOption = response.configOptions.find((option: any) => option.id === "model");
+          expect(modelOption.options.map((option: any) => option.value)).toEqual(
+            availableModels ? ["default"] : ["default", "sonnet"],
+          );
+        } finally {
+          await agent.dispose();
+          vi.unstubAllEnvs();
+        }
+      },
+    );
+
     it("restricts configOptions to the user's allowlist using their exact IDs", async () => {
       // Reproduces the scenario from
       // https://github.com/agentclientprotocol/claude-agent-acp/issues/620:

src/tests/v2/v2.test.ts

@@ -9,7 +9,7 @@
  * `session_state_changed`.
  */
 import { randomUUID } from "node:crypto";
-import { mkdtemp, realpath, rm } from "node:fs/promises";
+import { mkdtemp, realpath, rm, writeFile } from "node:fs/promises";
 import * as os from "node:os";
 import * as path from "node:path";
 import { afterEach, beforeEach, describe, expect, it, vi } from "vitest";
@@ -495,6 +495,51 @@ describe("ACP v2 core", () => {
     );
   });
 
+  it.each(["environment", "caller object", "caller file"])(
+    "includes configured models omitted by the SDK from %s settings",
+    async (source) => {
+      const configured = {
+        availableModels: ["claude-haiku-4-5", "claude-haiku-5-5"],
+        modelOverrides: {
+          "claude-haiku-4-5": "global.anthropic.claude-haiku-4-5-20251001-v1:0",
+          "claude-haiku-5-5": "global.anthropic.claude-haiku-5-5",
+        },
+      };
+      let settings: typeof configured | string | undefined;
+      if (source === "environment") {
+        vi.stubEnv("CLAUDE_MODEL_CONFIG", JSON.stringify(configured));
+      } else if (source === "caller file") {
+        settings = "caller-settings.json";
+        await writeFile(path.join(cwd, settings), JSON.stringify(configured));
+      } else {
+        settings = configured;
+      }
+      const client = v2Client();
+      await client.connect(async (agent) => {
+        await agent.request(v2.methods.agent.initialize, {
+          protocolVersion: v2.PROTOCOL_VERSION,
+          info: { name: "v2-test-client", version: "1" },
+        });
+        const response = await agent.request(v2.methods.agent.session.new, {
+          cwd,
+          _meta: { claudeCode: { options: { settings } } },
+        });
+        const ids = ["default", ...Object.values(configured.modelOverrides)];
+        const model = response.configOptions?.find((option) => option.configId === "model");
+        expect(model).toMatchObject({
+          options: ids.map((value) => expect.objectContaining({ value })),
+        });
+        await agent.request(v2.methods.agent.session.setConfigOption, {
+          sessionId: response.sessionId,
+          configId: "model",
+          type: "id",
+          value: ids[2],
+        } as v2.SetSessionConfigOptionRequest);
+        expect(sdk.processes[0].setModel).toHaveBeenLastCalledWith(ids[2]);
+      });
+    },
+  );
+
   it("routes the sessions started after a gateway login through the gateway", async () => {
     const client = v2Client();
     const baseUrl = "https://gateway.example.com";

src/v1/acp-agent.ts

@@ -10409,15 +10409,15 @@ export class ClaudeAcpAgent {
         }
       }
 
-      // Apply user's `availableModels` allowlist from settings.json before any
+      // Apply the effective `availableModels` allowlist before any
       // downstream model handling. `initializationResult.models` is already
       // policy-filtered by the CLI; we rebuild the picker from the allowlist
       // so the user's exact spellings (and `modelOverrides` targets) are the
       // values passed to `setModel`, keeping configOptions, the current-model
       // resolver, and the stored modelInfos consistent with what the user
       // configured. Managed `deniedModels` drops entries the CLI would refuse.
-      const settingsAvailableModels = settingsManager.getSettings().availableModels;
-      const settingsModelOverrides = settingsManager.getSettings().modelOverrides;
+      const { availableModels: settingsAvailableModels, modelOverrides: settingsModelOverrides } =
+        settingsManager.getModelSelectionSettings(configuredSettingsObject);
       const resumedModel = await resumedModelHint;
       // A resumed Fable 5.2 session lists Fable 5.2 as `fable`, as a new
       // session does (see `aliasResumedModelRow`).

src/v2/agent.ts

@@ -857,6 +857,7 @@ class V2Agent implements AgentHandle, SessionConnection {
         resumed,
         sessionId,
         this.logger,
+        configured,
       );
     } catch (error) {
       // Claude Code refused a fresh session's model pin.

src/v2/setup.ts

@@ -11,6 +11,7 @@ import {
   type ModelInfo,
   type Options,
   type Query,
+  type Settings,
 } from "@anthropic-ai/claude-agent-sdk";
 import type { Logger } from "../logger.js";
 import type { NewSessionMeta } from "../new-session-meta.js";
@@ -67,13 +68,15 @@ export async function sessionModels(
   resumed: { model?: string } | undefined,
   sessionId: string,
   logger: Logger,
+  configuredSettings?: Settings,
 ): Promise<{
   models: SessionModelState;
   modelInfos: ModelInfo[];
   currentModelInfo: ModelInfo | undefined;
   allowlistedModelInfo: ModelInfo | undefined;
 }> {
-  const { availableModels, modelOverrides } = settings.getSettings();
+  const { availableModels, modelOverrides } =
+    settings.getModelSelectionSettings(configuredSettings);
   // A resumed Fable 5.2 session lists Fable 5.2 as `fable`, as a new session does.
   const listed = aliasResumedModelRow(sdkModels, resumed?.model);
   const allowed = Array.isArray(availableModels)