VS Code unable to create AI Foundry Project

[IBFCGirishMCT]

Does this occur consistently?
Repro steps:

Action: l.getChildren
Error type: c
Error Message: Failed to load Prompt Agents for project GPT-5-Experiment: 500: Internal Server Error

Version: 1.6.12
OS: win32
OS Arch: x64
OS Release: 10.0.26100
Product: Visual Studio Code
Product Version: 1.137.0
Language: en
UTC time: Sat, 12 Sep 2026 08:07:43 GMT

Call Stack

a.loadChildrenOnce extension.js:2418:61002
async a.loadUntilCurrent extension.js:2418:60391
async a.loadChildren extension.js:2418:60205
async a.getChildren extension.js:2418:59777
extension.js:2160:11354extension.js:2160:11354
async o extension.js:1908:19265
async a.<anonymous> extension.js:2160:11298
async a extension.js:5556:132227
async m.getFoundryAgentEntries extension.js:5556:134803
async m.getChildren extension.js:5556:134220
async r._fetchChildrenNodes extensionHostProcess.js:672:107752
async r.getChildren extensionHostProcess.js:672:103210
async wR.$getChildren extensionHostProcess.js:672:97625

[microsoft-github-policy-service]

Thank you for contacting us! Any issue or feedback from you is quite important to us. We will do our best to fully respond to your issue as soon as possible. Sometimes additional investigations may be needed, we will usually get back to you within 2 days by adding comments to this issue. Please stay tuned.